In technical analysis, Bullish Harami candle is known as a preferred signal, having high accuracy in catching the big uptrend of prices. So, what is a Bullish Harami candlestick pattern? What is the meaning and how to use it in binary options trading? Today, Mr. Joker will help you clarify everything about this special candlestick pattern.
A video introduces how to trade Binary Options with Bullish Harami candle
What is A Bullish Harami candle pattern?
Bullish Harami is a Japanese candlestick pattern that looks like a pregnant woman. It usually appears at the end of a downtrend and is a sign of future bullish momentum.
This is considered the most powerful, most accurate candlestick signal confirming a reversal from a decline to a rise in prices. This is a very good entry signal for you to enter profitable transactions safely.
Characteristics of a Bullish Harami pattern
A standard pattern consists of 2 candles.
- The first candlestick is a strong bearish red candle.
- The second one is a green candlestick that lies within the first one.
On the price chart, the Bullish Harami candle usually appears at the end of downtrends, signaling a future rise in prices.
Here is an example of a Bullish Harami candlestick pattern on the Japanese candlestick price chart.
The variant Bullish Harami pattern
In addition to the standard pattern, traders are also interested in its variations. Unlike the standard, Bullish Harami’s variations are the patterns with the second candlestick being special green candlesticks such as Shooting Star or Pin Bar.
Bullish Harami meaning
Why do traders consider this pattern as a signal for an uptrend of prices? Observing in more detail, we can see that when combining two candlesticks of this pattern, we will get a Bullish Pin Bar (or Hammer). This is a very common bullish signal often encountered on price charts.
How to trade Binary Options with Bullish Harami
Price Action traders consider the pattern as a reliable confirmation point for upward price trends. Therefore, using this candlestick pattern combined with price trend indicators will give the most effective entry points.
Notes: This is a bullish reversal signal of price. So, when using Bullish Harami, you can only open “UP” orders.
Combine with RSI indicator
RSI is a reliable price trend indicator. However, this indicator alone does not give exact reversal confirmation points. When combined with the pattern, the entry points are clearer. It will be safer to open an order.
Conditions: The 5-minute Japanese candlestick chart, RSI indicator (14). Enter a trade with an expiration time of 15 minutes.
How to open an option:
+ UP option: when a Bullish Harami appears and the RSI is in the oversold area (30).
Combine with Support
Support is an effective static level for prices. When touching this zone, prices will likely rebound. A Bullish Harami that appears when the price enters the support zone is a positive signal for this. You can absolutely open an UP order with a high level of security.
Conditions: The 5-minute Japanese candlestick chart, support zone. The expiration time is 15 minutes or above.
How to open an option:
+ UP option: when the price enters the support zone and a Bullish Harami appears.
Notes when using this candlestick pattern in binary options trading
- This candlestick pattern itself is a signal of price reversal. When trading, do not consider it alone as an entry point. You need to combine it with other indicators to increase the probability of trading.
- Combining with price trend indicators will be the best use for the Bullish Harami candlestick pattern.
- You need to experience this candlestick pattern at least 2 weeks on a DEMO account before being able to trade with real money. Everything must be perfect before thinking of making a profit in this market.
There will be a lot of knowledge about the indicators and candlestick patterns which we will introduce in this series. Please follow up. Goodbye and see you again.