You know, when I first started understanding candlesticks, I couldn’t figure out what a harami was and why it’s important. Turns out, it’s one of the most reliable patterns for spotting reversals.

Harami is a Japanese word that translates as "pregnant." And if you look at the chart, it’s immediately clear why it’s named that way. The pattern consists of two candles, where the second candle is completely inside the body of the first, as if "nested" within it. It looks really funny.

The first candle is always large and indicates the direction of the previous trend. Then a small second candle appears, signaling a weakening of that trend. That’s where the interesting part begins.

There are two options. A bullish harami appears when the price was falling, the first candle is red, and the second is small and green. This hints that the decline might be ending and the price could go up. A bearish harami works the opposite way — after a price increase, the first candle is green, and the second is small and red, indicating a possible decline.

An important point: harami patterns work best when they appear at support or resistance levels. I always confirm this signal with volume or RSI to avoid false reversals. Just looking at the pattern isn’t enough; additional indicators are needed.

In general, if you learn to recognize this pattern, you can catch reversals earlier than most. The main thing is not to rush into a trade immediately, but wait for confirmation.