The bullish and bearish Harami candlestick patterns are very similar to the engulfing patterns, with the main difference being that Harami candlesticks can both be the same candle type, so both candles are allowed to be bullish or bearish.
The Harami pattern consists of two individual candles.
The first candlestick should be a large candle with full body.
The second candlestick should be much smaller, and be completely engulfed by the first candle. It is perfectly acceptable for the second candle to be a bullish or bearish Doji or Spinning Top, though neither are required. Keep in mind that if a Doji candle does appear in the context of a Harami, it is called a Harami Cross.
Again, the second candle can be bullish or bearish, but more often than not the smaller second candle will be the opposite of the first candle.
The context within which a Harami candlestick pattern appears is very important. There must be an established trend on the chart since the Harami is a trend reversal candle pattern. A Harami forming near areas of support, resistance and trend levels make the Harami candle pattern much more reliable.
With this said, the Harami pattern is extremely easy to find on most charts and time frames, and so the formation of the Harami does not mean a trend reversal is definite. In fact, Bulkowski’s testing showed the Harami pattern to have a mere 53% accuracy, which is pretty lousy, and is one of the reasons the Harami pattern only merits 2 whole stars.
The word “Harami” translates to “pregnant” in Japanese. This is because the first candle is large and completely envelopes the second candle, similar to how a mother holds her infant.