In technical analysis, Bullish Harami is known as a preferred signal, having high accuracy in catching the big uptrend in Forex. So, what is A Bullish Harami candlestick pattern? What does it mean and how to use it in Forex? Today, I will help you clarify everything about this special candlestick pattern.
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What is a Bullish Harami candlestick pattern?
Bullish Harami candlestick pattern (looked like a pregnant woman) is a Japanese candlestick pattern that includes two candles as follows: The first candle is a strong red bearish candlestick. The second one is a green bullish candlestick that lies within the first one.
In the West, it is called the Bullish Inside Bar candlestick pattern. In Japanese, the shape of this pattern resembles that of a pregnant woman. It is a very accurate signal, confirming a bearish to bullish reversal. This is a very good entry signal for you to enter profitable transactions safely.
Considering comprehensively, the pattern appearing in large time frames (H4, D, etc.) will be equivalent to a Triangle pattern in small time frames (M15, M30, etc.). This is a common form of market accumulation before a reversal or a continuation in an uptrend occurs.
Meaning of the Bullish Harami in Forex
Why is the Bullish Harami candlestick pattern a signal for an uptrend in Forex? Observing in more detail, we can see that when combining this candlestick pattern, we will get the Pin Bar (or Hammer) candlestick pattern. This is a very common bullish signal often encountered on price charts.
This pattern often appears at the end of downtrends. It warns traders that the price might bounce back after this candlestick pattern. In some cases, it can appear in uptrends. This reinforces the uptrend of the price.
The variant patterns
Apart from the standard Bullish Harami candlestick pattern, Forex traders are also interested in variations of this special candlestick pattern. These variations are the candlestick patterns with the second candlestick being special Candlesticks such as Shooting Star or Pin Bar.
How to trade Forex effectively with the Bullish Inside Bar
As a strong and reliable bullish signal, Bullish Harami is most often used as a signal to confirm the entry point by professional traders. It is because the price is likely to rise sharply after it comes out. Therefore, you can only open BUY (Long) orders with it. Here are 2 basic strategies to trade Forex that you can refer to.
Strategy 1. Fish the bottom of the market
The basis for opening an order in Forex is when Bullish Harami appears in a downtrend. Focus on opening BUY orders because it is likely that the price will increase. For the strategy to be more effective, you can combine this signal with other indicators.
Open a BUY order as follows:
+ Entry Point: As soon as the price completes the pattern.
+ Stop-Loss: At the lower shadow of the first bearish candlestick in the pattern
+ Take-Profit: when the price touches old resistance levels that have been formed in the past.
Strategy 2. Open an order following the trend
This trading strategy is safer because you can only place orders when the uptrend has formed. In Forex, Bullish Harami appears to confirm that the price will continue to rise.
Open a BUY order as follows:
+ Entry Point: As soon as the price completes the pattern.
+ Stop-Loss: At the lower shadow of the first bearish candlestick in the pattern
+ Take-Profit: when the price touches old resistance levels that have been formed in the past.
In addition to the two basic trading strategies above, in the strategic articles, you will come across the Harami pattern incorporating multiple time frames. Or they can use it in conjunction with other trading signals. This is a candlestick pattern that has many uses in Forex.
Summary
In Forex, candlestick and price signals are very important to every trader. And Bullish Harami is no exception. This is a very good confirmation signal of a trend reversal. Get acquainted and test it on a Demo account today. Goodbye and see you again.
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The post Bullish Harami Candlestick: Characteristics And How To Trade In Forex appeared first on How To Trade Blog.
source https://howtotradeblog.com/how-to-trade-bullish-harami-pattern-forex/
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