Forex glossary
Harami
Harami consists of two candles, with the second small body contained within the first large body; classic versions use opposite directions. The second candle's shadows may extend outside the first body. Its preceding trend affects interpretation, but the pattern does not guarantee reversal.
Illustrative example
How does it work in practice?
Assume the first candle falls from 110 to 100, followed by a bullish body from 103 to 105. The second body is contained, even if its high or low extends outside the first body's range.
A case to work through
Body inside, shadow outside
Hypothetically, the first body spans 60–70 with high=71; the second body spans 64–66 with high=72.
- The second body fits within 60–70.
- The second high exceeds the first, so the full range is not contained.
What follows? Consider the harami criterion but reject an inside bar under the full-range rule.
Example boundary: Body sizes, directions and prior trend also matter to full identification.
A useful distinction
Harami / Inside Bar
Harami checks bodies; an inside bar compares complete high–low ranges.
Check your understanding
Identify body containment without an inside-bar condition.
Show the answer and explanation
No; the 64–66 body remains inside 60–70
Body and range conditions are separate.
Bodies, shadows and context
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Read the fuller explanation
Related terms
Sources and documentation
- TA-Lib – ta_CDLHARAMI
Original OHLC body/shadow detection code and configurable candle thresholds; implementation is not effectiveness evidence.
Document read:
The example illustrates the mechanism. Check current account conditions and instrument specifications with the provider.