Harami cross pattern: definition, how to identify it, and trading strategies
Learn what the harami cross pattern is, how to identify it on a chart, and how traders may use it to spot potential reversals. Includes bullish and bearish examples.
This guide explains how the harami cross forms, how traders identify bullish and bearish versions, and how it can be assessed alongside confirmation signals, indicators and risk management.
- The harami cross is a two-candle reversal pattern: a large directional candle followed by a doji contained within its body.
- A bullish version forms at the end of a downtrend; a bearish version forms at the end of an uptrend.
- The doji second candle distinguishes it from the standard harami and signals more complete indecision.
- Waiting for a confirming candle in the direction of the anticipated reversal before entering is standard practice.
- The stop-loss is placed beyond the extreme of the large first candle – below its low for bullish setups, above its high for bearish.
- The pattern is most reliable on daily and weekly charts; on intraday timeframes, doji candles are far more common and less meaningful.
What is the harami cross?
The harami cross is a two-candlestick reversal pattern used in technical analysis. It consists of a large candle followed immediately by a doji, where the doji's body sits entirely within the body of the first candle. The word 'harami' comes from the Japanese for 'pregnant', a reference to the way the small doji appears to be contained within the larger candle, with the first candle acting as the 'mother'. The doji, with its near-identical open and close, reflects a pause or indecision in price action after a sustained directional move.
The pattern appears in two forms, depending on the preceding trend. A bullish harami cross forms after a downtrend, when a large bearish candle is followed by a doji. This may suggest that selling pressure is easing. A bearish harami cross forms after an uptrend, when a large bullish candle is followed by a doji. This may suggest that buying momentum is fading. In both cases, the doji is the critical element. It reflects an almost complete balance between buyers and sellers. When it forms directly inside a strong directional candle, that shift in momentum may carry weight for traders watching for possible reversals.
How do you identify a harami cross on a chart?
The harami cross has a precise structure. The five criteria below should be present for the pattern to qualify.
- Step 1: an established directional trendThe pattern must form after a clear prior move: a downtrend for the bullish version, or an uptrend for the bearish version. A harami cross appearing in a sideways or choppy market may have less predictive value.
- Step 2: a large first candle in the direction of the trendThe first candle should have a substantial body, confirming the existing trend's momentum. For the bullish harami cross, this is a large bearish candle. For the bearish harami cross, it is a large bullish candle. The larger the first candle relative to recent bars, the more significant the contrast with the doji that follows.
- Step 3: a doji as the second candleThe second candle must be a doji, meaning the open and close are at, or very close to, the same price. This distinguishes the harami cross from the standard harami pattern, which uses any small-bodied candle rather than a true doji. The doji suggests that neither buyers nor sellers dominated during the session.
- Step 4: the doji contained within the first candle's bodyBoth the open and close of the doji must fall within the open-to-close range, or body, of the first candle. The doji's wicks may extend beyond the first candle's body, but the body itself must remain enclosed.
- Step 5: a gap or clear difference in positionIn practice, particularly on daily candlestick charts, the doji will often open near the centre of the first candle's body, sometimes gapping slightly in the opposite direction from the trend. This can reinforce the sense that prior momentum has stalled.
Past performance is not a reliable indicator of future results.
Is the harami cross bullish or bearish?
The harami cross can be either bullish or bearish. The signal direction depends on where the pattern appears within the prevailing trend.
Past performance is not a reliable indicator of future results.
How to trade the harami cross
Trading the harami cross involves a structured process, from validating the pattern through to setting a profit target. This structure can help traders reduce the risk of false entries that may come from acting on the doji alone.
- Step 1. Confirm the pattern is validBefore acting, check that all identification criteria are met: an established trend, a large first candle, a true doji, and full body containment. Partial matches reduce the reliability of the signal and call for additional caution. This includes cases where the doji's body sits partly outside the first candle's body, or where the 'doji' has a visible body.
- Step 2. Wait for confirmation
The harami cross alone is not a trading signal. It is a warning that prevailing momentum may be shifting. Waiting for a confirming candle can help traders filter weaker setups.
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For a bullish harami cross, some traders wait for the next candle to close bullish, above the doji's close, before considering a long entry.
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For a bearish harami cross, some traders wait for the next candle to close bearish, below the doji's close, before considering a short entry.
Some traders also require the confirming candle to close beyond the midpoint of the first, large candle for added confirmation.
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- Step 3. Check volumeVolume provides a useful filter. For a bullish harami cross, traders may look for high volume on the first bearish candle, indicating heavier selling activity, followed by lower volume on the doji and rising volume on the confirmation candle. For a bearish harami cross, high volume on the first bullish candle, followed by a volume decline on the doji and a pick-up on the bearish confirmation candle, can support the case for a reversal.
- Step 4: Identify your entry point
Entry approaches vary by trader preference. Hypothetical examples include:
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Confirmation entry: enter at the open of the candle following the confirming bar, once the reversal is confirmed.
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Close-of-confirmation entry: enter at the close of the confirming candle itself, accepting a slightly later but validated entry.
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Aggressive entry: enter at the doji's close. This carries higher risk because confirmation has not yet arrived.
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- Step 5. Place a stop-loss
For a bullish harami cross, traders typically place the stop-loss below the low of the first, large bearish candle. For a bearish harami cross, they typically place it above the high of the first, large bullish candle. This placement defines the point at which the reversal thesis is invalidated. If price moves beyond the first candle's extreme, the pattern has likely failed.
Stop-loss orders are not guaranteed. Guaranteed stop-loss orders incur a fee if activated.
- Step 6. set a profit target
Common profit target approaches include:
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Fixed risk:reward ratio:target at least 1:2 risk:reward based on the stop-loss distance.
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Next significant level: target the nearest area of support or resistance in the direction of the reversal.
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Prior swing high or low: for bullish reversals, target the most recent swing high. For bearish reversals, target the most recent swing low.
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Past performance is not a reliable indicator of future results.
What is a failed harami cross?
A failed harami cross occurs when the pattern forms correctly but price continues in the direction of the original trend instead of reversing. This is one of the most common risks associated with candlestick reversal patterns. The pattern may signal a potential shift in momentum, but the underlying trend can reassert itself before a meaningful reversal develops.
Why harami cross patterns fail
Several conditions are associated with higher failure rates.
| Condition | Why it matters |
|---|---|
| Strong trend context | When the prior trend is exceptionally strong and supported by fundamentals or broad market momentum, a single two-candle pattern may only represent a brief pause. |
| Absence of confirming volume | If volume on the doji and confirming candle does not reflect a shift in participation, the pattern carries less weight. |
| Pattern at a non-significant level | Harami crosses that form away from key support or resistance zones, moving average levels, or round-number price areas are more likely to fail. |
| Low timeframe noise | On intraday charts, doji candles are common and often less meaningful. A harami cross on a one-hour chart typically carries less significance than the same pattern on a daily chart. |
Managing a failed pattern
The stop-loss placement described in Step 5 is designed to manage the risk of a failed harami cross. If price breaks below the low of the first candle in a bullish setup, or above the high of the first candle in a bearish setup, the stop-loss is triggered and the position is closed. Traders generally avoid moving stop-losses wider in the hope that the pattern will still play out, as doing so removes the risk-management structure that the strategy relies on.
Indicators commonly used with the harami cross
Discover more indicators on our technical analysis page.
Harami cross vs harami pattern
The harami cross and the standard harami pattern share the same two-candle structure: a large first candle followed by a smaller second candle contained within the first candle's body. They differ in one critical element: the nature of the second candle.
In a standard harami, the second candle can be any small-bodied candle, bullish or bearish, as long as its body is contained within the first candle's body. In a harami cross, the second candle must be a doji – a candle where the open and close are equal, or close enough to be practically the same, producing a cross-like appearance on the chart.
| Context | Harami cross | Harami pattern |
|---|---|---|
| Second candle | Doji: open ≈ close | Any small-bodied candle |
| Signal strength | Generally considered stronger | Moderate |
| Indecision signal | High: neither side dominated | Moderate: slight edge to one side |
| Frequency | Less common | More common |
| Confirmation required | Yes | Yes |
The practical distinction matters because a true doji represents a more complete equilibrium between buyers and sellers than a small-bodied candle that still has a directional bias. For this reason, the harami cross is often viewed as the stronger reversal signal of the two. However, neither pattern should be traded without confirmation. Frequency is also a trade-off: the harami cross is rarer, meaning fewer signals, but potentially higher-quality ones when they appear.
Harami cross chart examples
The following examples show how valid bullish and bearish harami crosses might appear in practice, including typical entry, stop-loss and target logic for each.
Bullish harami cross example
Consider a daily chart of a major equity index that has been in a sustained downtrend for several weeks. On a Monday, a large bearish candle extends the decline, closing near its low. On Tuesday, price opens slightly higher, trades in a narrow range throughout the session, and closes almost exactly at its open, forming a doji whose body sits well within the prior day's candle body. This creates a bullish harami cross. On Wednesday, a bullish candle closes above the doji's close, providing confirmation. A trader might enter long at Wednesday's close, place a stop-loss below Monday's low, and target the prior swing high or the next area of resistance.
Past performance is not a reliable indicator of future results.
Bearish harami cross example
On a weekly chart of a commodity, an uptrend has been in place for several months. In one week, a large bullish candle pushes price to a new high. The following week opens near the prior week's close, trades in a tight range, and closes almost where it opened, creating a doji contained within the previous week's body. The bearish harami cross is complete. The next week produces a bearish candle closing below the doji's close, confirming the pattern. Traders might enter short at or after that candle's close, with a stop-loss above the prior week's high and a profit target at the nearest support level below.
Past performance is not a reliable indicator of future results.
Common mistakes when trading the harami cross
Several recurring errors can undermine the reliability of harami cross setups. Most stem from applying the pattern too loosely or skipping steps in the confirmation process.
- Entering without confirmation. The doji signals uncertainty, not an entry. Waiting for the next candle can help filter out weaker setups.
- Misidentifying the doji. A small-bodied candle isn’t the same as a true doji. Loose criteria can turn the setup into a standard harami rather than a harami cross.
- Ignoring the trend. The harami cross is a reversal pattern, so it needs a clear trend to reverse. In sideways markets, it’s usually less meaningful.
- Placing the stop-loss too tight. A stop-loss inside the first candle’s body may be triggered by normal volatility. Many traders use the first candle’s high or low as the pattern’s invalidation point.
- Skipping higher timeframes. A lower-timeframe signal may be weaker if it goes against the broader trend. Checking the higher timeframe can add useful context.
- Overlooking confluence. Stronger setups often combine a clear prior trend, a true doji, body containment, a confirming candle and a key level such as support, resistance or a moving average.
Past performance is not a reliable indicator of future results.
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FAQ
What does a harami cross signal?
A harami cross signals a potential reversal in the current trend. The bullish version, appearing after a downtrend, suggests that selling pressure may be easing and buyers could be gaining influence. The bearish version, appearing after an uptrend, suggests that buying momentum may be fading. Neither version is a guaranteed reversal signal, so traders typically look for confirmation from a subsequent candle before acting on the pattern.
Is the harami cross reliable?
The harami cross is generally considered more reliable than the standard harami pattern because the doji second candle represents stronger indecision between buyers and sellers. However, like all candlestick patterns, it can produce false signals, particularly on lower timeframes and in strong trend environments. Combining the pattern with other technical tools such as RSI, volume analysis, and support and resistance levels can improve its usefulness as part of a broader strategy. Past performance is not a reliable indicator of future results.
How is the harami cross different from a doji?
A doji is a single candle with an open and close at approximately the same price. A harami cross is a two-candle pattern in which the second candle is a doji contained within the body of a large preceding candle. The harami cross provides more context than a standalone doji because it combines the doji's indecision signal with the information carried by the large first candle, including trend direction, candle size, and the contrast between the two candles.
What timeframe works best for the harami cross?
The harami cross is most commonly used on daily and weekly charts, where each candle represents more market activity and patterns tend to carry more statistical weight. On intraday timeframes, such as 15-minute and one-hour charts, doji candles form more frequently and the pattern is less distinctive, which can result in a higher rate of false signals. Traders using the pattern on lower timeframes typically require additional confirmation before entering a position.
Where should I place a stop-loss on a harami cross trade?
For a bullish harami cross, traders typically place the stop-loss below the low of the first, large bearish candle. For a bearish harami cross, they typically place it above the high of the first, large bullish candle. This position defines the point at which the reversal thesis is clearly invalidated. If price moves beyond this level, the pattern has failed and the position should be closed. Stop-loss orders are not guaranteed. Guaranteed stop-loss orders incur a fee if activated.
Can the harami cross appear at support or resistance levels?
Yes, and this is often considered one of the more meaningful contexts in which the pattern can form. A bullish harami cross appearing at a well-established support level, where price has previously found buyers, combines the structural signal of the pattern with the confluence of that technical level. The same logic applies to a bearish harami cross forming at a resistance zone. Patterns that form at technically significant levels are generally viewed as higher-quality setups than those that appear in open price space.
