Bearish Harami Pattern: Spotting Reversals with Discipline

24 Ogo

🔻Bearish Harami Pattern: Spotting Reversals with Discipline

Intro / Overview
The Bearish Harami is a candlestick reversal pattern that often appears at the end of an uptrend.
It signals a possible shift where bullish momentum weakens and sellers begin to step in.
The first candle’s high must be a swing high, and this level can also be used as a stop-loss reference.
To trade it effectively, spotting the formation is not enough — strict validation and invalidation rules are key to avoid false signals.

✨ Concept
A Bearish Harami is a two-candle pattern:
- First candle (Green🟢): A strong bullish candle showing buyer dominance.(Swing high)
- Second candle (Red🔴): A smaller bearish candle whose body is fully inside the prior green candle’s body (wicks ideally inside).

This forms the “harami” structure, where the red candle looks like it is “inside the green candle,” suggesting a pause in bullish pressure and potential reversal.

📖 How to Use
1️⃣ Identify the pattern: Look for a large green candle followed by a smaller red candle contained within it.

2️⃣ Validation Point: The setup is validated if price closes below the open of the green candle within the next few candles.

3️⃣ Invalidation Point: The setup is invalidated if price closes above the close of the green candle before validation occurs.

4️⃣ Stop-Loss & Targets:
- Stop-loss (SL): Place at or just above the swing high (first green candle high).
- Target (TP): 1x, 2x, or more times the distance between entry and stoploss.

5️⃣ Enhance Reliability: Combine with resistance levels, trendlines, moving averages, or other candlestick signals to filter out weak setups.

📊 Chart Explanation – Step by Step
✔ The Bearish Harami pattern was spotted after a clear uptrend.
✔ The following candle closed below the green candle’s open → Validation confirmed ✅.
✔ A short entry was taken on the same candle.
✔ A Bearish Harami pattern has also been drawn and highlighted on the chart.

🔍 Observation
- If Target 1 is achieved → book 2 lots, and trail the remaining position with a stop-loss.
- Harami is only a potential reversal → confirmation is necessary.
- Breakdown below the green candle’s open = sellers in control 🔻.
- Breakout above the green candle’s close = setup failure ❌.
- Patience is key — wait for confirmation before entering.

📌 Why It Matters?
The Bearish Harami helps traders by:
- Reducing false reversal trades with strict rules.
- Providing clear entry/exit levels with discipline.
- Enforcing risk management via pre-defined SL & TP.

✅ Conclusion
The Bearish Harami becomes powerful when traded with discipline.
By marking the open and close of the green candle, traders can clearly separate a valid short trade from a failed setup.
With a stop-loss at the swing high and take-profits at 1x, 2x, or more, while trailing further lots, the Harami offers a structured, rule-based strategy.

⚠️ Always remember: the pattern shows possibility → price confirmation makes it probability.

⚠️ Disclaimer
For educational purposes only · Not SEBI registered · Not a buy/sell recommendation · No investment advice — purely a learning resource

30 Ogo

Nota

On 14 Aug, 2025 (13:45) ⏰, the target level 🎯 was successfully achieved ✅, marking the completion of the primary setup 📈.
The remaining lots 📦 will continue to be trailed 🔄 using ATR 📊, Box Trailing 📐, and similar methods ⚙️ — with the possibility that the Trail SL 📉 may be triggered after a few candles 🕯️.
No further monitoring will be required 🚫, as the overall trade idea has been concluded 🏁.