Bearish Harami Pattern on a Live Gold Chart

What it shows

Each one gets a red label marked BH over the high of the second candle.

How Pravex works it out

1. For the bearish harami, a body is the distance between open and close, and long or small is judged against a 14-candle exponential average of those bodies: above it is long, below it is small. The first 13 candles have no average yet, so no bearish harami is found there.
2. The bearish harami starts with a rising candle (close above open) whose body is long, above the average.
3. The second candle must be falling and small (below the average). Its body has to sit inside the first body, between the first open and the first close, edges included, and be smaller than the first body. Shadows are not tested.
4. Before the bearish harami counts, the first of the two candles has to show an uptrend, which by default means a close above the 50-candle simple moving average.
5. Example numbers, not a live price: the first candle rises from 2,030 to 2,042. The second opens at 2,040 and closes at 2,036, a body of 4 inside 2,030 to 2,042.

Settings

Setting	Default	What changing it does
Trend check	SMA50	How the uptrend before the bearish harami is measured on the first candle: SMA50 compares its close with the 50-candle simple average. The choice that adds SMA200 also needs the 50-candle average above the 200-candle one, so fewer bearish harami labels appear, and the last choice turns the check off.
Label colour	Red (#F23645)	Change it to tell the bearish harami apart from other patterns on the same chart. It fills the BH label over the high of the last candle; the text stays white.

How traders read it

The long rising candle is buyers at full strength. The small falling candle inside it shows that strength did not carry into the next candle. On its own that is a pause, not a top, and it is one of the milder warnings on this list.

The first candle gives you the levels. A close under its open, the bottom of its body, is the usual sign that the sellers have taken over. A close above its high means the pause is over and the rise goes on. If you act on the pattern before either happens, keep the position small.

When it misleads

In a strong uptrend, small candles inside a big one are often just a rest before the next leg. A bounce in a falling market can pass our uptrend test, which only asks for one close above the 50-candle average. Shadows are ignored, so the second candle’s high can be above the first, which is a different picture from the drawing in most books. The candle still forming is checked again on every update, so a bearish harami label can show up on it and vanish before the close; only a bearish harami label on a closed candle stays.

Questions and answers

What is a bearish harami?

Two candles after a rise: a long rising candle, then a small falling candle whose body sits inside the first body.

Is a bearish harami reliable?

It is a mild sign of a pause. It needs a close below the first candle’s body to become a real case for a turn.

What is the difference between a bearish harami and a bearish engulfing?

They are opposites in size. In a harami the second body is small and inside the first. In an engulfing the second body is bigger and covers the first.

Related: Harami - Bullish, Harami Cross - Bearish, Engulfing - Bearish, All Candlestick Patterns, every indicator.