Bullish Harami Cross: The High-Stakes Reversal Pattern
Introduction
The Bullish Harami Cross is a strict variation of the standard Harami. The difference? The “baby” candle is not just small—it’s a Doji (where Open equals Close).
This is considered a more potent signal than the standard Harami because it represents total market paralysis before a potential explosion.pattern chart" src="https://encrypted-tbn1.gstatic.com/licensed-image?q=tbn:ANd9GcSLxehZilUgEhURDObMFB4n3XrAwlI7cUA0OWn9SBTXweVIY6CS6p_b7yNi5yYSbH52bjWdu6ZQaMqISPv5xVm3qOu7KQapScNNxz4wC9RNDD2urcQ">
How to Identify It
- Candle 1: A Long Red candle.
- Candle 2: A Doji (looks like a cross or plus sign).
- The Rule: The Doji must be completely contained within the body of the previous Red candle.
The Psychology
A Doji represents a perfect tie between buyers and sellers. When this happens after a massive crash (the long red candle), it shocks the market. The confidence of the sellers has evaporated instantly. This sudden freeze often precedes a violent move in the opposite direction.
Trading Strategy
- The Squeeze: This pattern often forms a “pennant” on lower timeframes.
- Entry: Place a buy-stop order above the high of the Mother candle.
- Warning: If price breaks the low of the Mother candle, the crash will resume violently.