A Bearish Harami is a two-candle chart pattern used in technical analysis, commonly seen as a potential reversal signal from a bullish trend to a bearish one. It gets its name from the Japanese word “harami,” meaning “pregnant,” as the pattern visually resembles a smaller candlestick “inside” a larger one.

📉 Bearish Harami Pattern Breakdown:

1. First Candle (Bullish):
   • Long green (or white) candlestick.
   • Indicates strong upward momentum.
2. Second Candle (Bearish or Doji):
   • Small red (or black) candlestick.
   • Completely contained within the body of the first candle.
   • It can be bearish or a doji (indicating indecision).

🔍 Key Characteristics:

• The second candle does not need to close lower than the first, just inside the body.
• It suggests that buying pressure is weakening.
• More reliable when it appears after a strong uptrend.

✅ Confirmation:

To increase reliability, traders usually wait for a third candle that confirms the bearish move — like a red candle that closes lower than the second candle.

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📊 Example:

Let’s say you see this on a chart:

• Day 1: Big green candle, price moves from $100 to $110.
• Day 2: Small red candle, price opens at $109 and closes at $107.

This could be a Bearish Harami — a warning that the uptrend may be losing steam.

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Want me to show you an example chart or code to detect it automatically in a dataset?

Trading with a Bearish Harami pattern is all about recognizing the potential shift in momentum and managing your risk wisely. Here’s a step-by-step guide you can follow:

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1. Identify the Pattern

Make sure the conditions are met:

• There’s a clear uptrend before the pattern.
• The first candle is large and bullish.
• The second candle is small and bearish (or a doji), and its body is completely within the first candle’s body.

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2. Wait for Confirmation

A common mistake is entering too early. Look for:

• A third candle that closes below the second candle.
• Increased volume can strengthen confirmation.
• You can also use technical indicators like RSI or MACD to confirm overbought conditions.

✅ Entry Signal:

• Enter a short position (or sell) once the price breaks below the second candle’s low.

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3. Set a Stop Loss

Protect yourself from false signals.

🔒 Where to place it:

• Just above the high of the first (bullish) candle.

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4. Set a Profit Target

Aim for a reward-to-risk ratio of at least 2:1.

🎯 Options:

• Use support levels to decide your exit.
• Or use a trailing stop to follow the price downward.

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5. Optional: Use with Other Indicators

• RSI: Overbought (above 70) supports bearish bias.
• MACD: A bearish crossover adds confidence.
• Volume: Low volume on the second candle + higher volume on the breakdown = stronger signal.

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📌 Example Trade Setup

Action	Price Level
Entry	Below 2nd candle’s low
Stop Loss	Above 1st candle’s high
Take Profit	Nearest support / 2x risk

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Would you like:

• A visual example/chart?
• Code to scan for this pattern in a dataset?
• Or examples from current stock charts?