Bullish Harami: What is It, Variations, Trading Strategy with Backtest Result

Bullish harami is one of the most popular bullish reversal candle patterns that helps traders to identify shifts in momentum from selling to buying. The bullish harami pattern is widely used by traders to exit their short positions or to plan long positions across all the assets like crypto, forex, commodity, and equity. 

The bullish harami pattern originated from Japanese candlestick charting techniques in the 18th century and was later introduced to global traders through Steve Nison’s work on candlestick analysis. The word harami means pregnant in Japanese. Visually the harami pattern looks like a baby (small bullish candle) inside the mother (the large bearish candle, hence this pattern also known as Pregnant Lady Pattern. 

What Is a Bullish Harami? 

Bullish harami is a two-candle trend reversal pattern that suggests potential change in trend from bearish to bullish. This pattern typically appears at the bottom of the downtrend with a large bearish candle (mother candle) followed by a smaller bullish candle (baby candle) that forms completely within the body of the first candle (mother candle). Ideally, the baby candle should be 25% or less of the mother candle body.

Unlike other bullish reversal candlestick patterns, bullish harami gives an early signal of change in sentiment which later gets confirmed by the confirmation candle. 

Is the Bullish Harami Bullish or Bearish? 

As the name suggests, a bullish harami is a bullish reversal candle pattern that suggests potential change in a trend from bearish to bullish. However, whether the trend will actually reverse depends on the next candle, the confirmation candle. Bullish harami is just a warning signal, if the next candle closes above the pattern’s high, it confirms pattern and trend reversal. 

According to Thomas Bulkowski’s study on bullish harami, trading standalone bullish harami without confirmation candle has success of 53%, but when traded with market context and confirmation, the success rate jumped significantly. 

What does the Bullish Harami Pattern Indicate?

The bullish harami pattern indicates the slowing of ongoing bearish momentum and entry of buyers. The first large bearish candle of the pattern shows strong selling driven by pessimism selling, while a small green candle suggests indecision and a reduction in selling pressure.

This means buyers are absorbing the selling pressure and can possibly overpower the sellers. If the next candle breaks the high of the pattern, it signals buyers have taken control and momentum shifted to bullish. Sometimes, institutions place huge buy limit orders at a particular price level. When price drops to that level, it immediately absorbs the selling pressure forming a bullish harami or bullish engulfing reversal pattern. 

How to Identify a Bullish Harami

There are five important steps to identify a bullish harami pattern. The steps are identifying the prior  trend, looking for the first candle, second candle, and confirmation. 

• A Prior Downtrend Must Exist: A bullish harami pattern always forms after a sustained downtrend. If bullish harami forms in a range bound or sideways market, it loses its significance. Hence, first identify whether the prior trend is bearish.
  
• First Candle Should Be Large and Bearish: Check whether the first candle (mother candle) of the pattern is a large bearish candle with relatively small shadow. The body of the mother candle should cover at least 70-75% of the total range of the candle. This suggests a strong selling pressure and control of bears in the market.
  
• Second Candle Should Be Smaller: The second candle (baby candle) should be a small bullish candle that stays within the body of the first bearish candle (mother candle). The baby candle should not be more than 25% of the mother candle. This reflects a slowdown in bearish momentum. If possible, look for a gap between the mother candle and baby candle, because in traditional Japanese candlestick theory, the second candle opens a gap up from the first candle.
  
• Look for Confirmation: The next candle close decides whether the bullish harami is valid or not. The next candle should close above the high of the pattern to confirm the reversal. 

The reliability of the pattern increases even more when it appears near the key support level or an oversold condition. 

Is a Bullish Harami a Buy Signal? 

Not directly. Bullish harami is not an immediate buy signal, it is just a signal of weakening selling pressure and possible bullish reversal. Whether to actually buy depends on the next candle (confirmation candle). 

Consider bullish harami buy signals only when the confirmation candle closes above the high of the pattern. Traders who enter aggressively without confirmation carries roughly 2–3x more risk than those who wait for confirmation. 

The Psychology Behind the Bullish Harami Pattern 

The bullish harami pattern shows the psychological shift from pessimism to optimism where sellers start to fall weak and gradually buyers enter to take control. Let’s understand it candle by candle. 

• First Candle (Mother Candle): The first large bearish candle suggests an aggressive selling driven by pessimism. At this point sellers expect the market to continue falling. 

• Second Candle (Baby Candle): At this point, buyers start absorbing selling pressure and form a small bullish candle within the range of the bearish candle (mother candle). Here, the market has entered a state of indecision, signalling a trend could reverse. 

• Confirmation Candle: Buyers aggressively enter the market after sellers get exhausted and push the price higher. This forms a large bullish candle that closes above the patterns high, confirming the trend reversal. 

A bullish harami, like many other Candlestick Patterns, does not indicate a reversal immediately; it initially suggests that sellers’ dominance is weakening. Whether the trend will reverse depends on the next candle, as these types of Candlestick Patterns require confirmation, especially when forming near a key level where institutions may be absorbing selling pressure.

3 Bullish Harami Variations We See on Charts 

There are three variations of bullish harami patterns based on the formation of a second candle and surrounding price action. All of this variation still signals weakening of selling pressure but differs in signalling strength of reversal signal. 

1.Bullish Harami Cross 

Bullish Harami cross is the strongest pattern in bullish harami variation. In this variation, the second candle (baby candle) forms a Doji instead of a small body candle. Doji signals that sellers have completely lost their momentum and they couldn’t even maintain a directional close. This makes the reversal signal significantly more powerful. 

However, a perfect bullish harami cross pattern is very rare to find in the real life market. A baby candle or second candle with body size less than 5% of mother candle is acceptable. 

2.Hidden Bullish Harami 

Hidden bullish harami is psychologically similar to traditional bullish harami, but differs in the market context. Unlike traditional bullish harami which appears at the end of the downtrend, hidden bullish harami appears after a pullback in an existing uptrend. 

Therefore along with the current timeframe trend, broader timeframe trend also matters while identifying hidden bullish harami. As this pattern appears after a pullback, the pullback should be healthy. If pullback retraces 38–50% of the prior upleg (Fibonacci confluence), it is considered a healthy pullback and bullish harami forming here tends to be highly reliable. 

3.Bullish Belt Hold

Bullish Belt Hold is a single candlestick bullish reversal pattern that carries the same psychology as bullish harami. Unlike other two variations, the bullish belt hold delivers a reversal message in just one powerful candle rather than two. 

In a bullish belt hold pattern, candle typically opens gap down and forms a strong bullish candle without lower shadow and closes near the previous session’s high. A gap-down of at least 1–2% strengthens the pattern significantly. 

Quick Comparison of All Three Variations
Variation	Candles	Signal Type	Strength	Best Used When
Bullish Harami Cross	2	Reversal	Strong	At key support after downtrend
Hidden Bullish Harami	2	Continuation	Moderate-Strong	During pullback in uptrend
Bullish Belt Hold	1	Reversal	Moderate-Strong	After downtrend with high volume
Classic Bullish Harami	2	Reversal	Moderate	After downtrend with confirmation

How to Trade the Bullish Harami? [With Real Chart Example] 

There are six steps to trade bullish harami candle patterns. The steps are briefly discussed below. 

• Identify the Trend: First identify the clear downtrend because the valid bullish harami form after a sustained downtrend. There should be at least 3–5 consecutive bearish candles. Bullish harami forming in a sideways market is usually less reliable. Here we have taken the example of BHEL. We can clearly see that the BHEL was falling continuously for the last two months. 

• Identify the Bullish Harami: A valid bullish harami has the first candle strongly bearish (mother candle) and second candle (baby candle) small that remains inside the range of the first candle (mother candle). If you find a gap-up opening in the second candle, its signal is even stronger. In our example, BHEL formed a bullish harami pattern near the end of Feb month.

• Wait for Confirmation: Avoid entering directly after identifying a valid bullish harami. Confirm the pattern with the next candle (confirmation candle) close. If the next candle closes strongly above the high of the pattern, it confirms the pattern. In our example, it did close above the pattern’s high, but the candle formed was Doji. However the next candle after Doji was a strong bullish candle, suggesting buyers entry. Remember, the confirmation candle only conforms to the pattern not reversal. 

• Enter the Trade: Enter a long trade after the pattern gets confirmed. We entered a confirmation candle after Doji formation at ₹64.80. 

• Place the Stop-Loss: Put your stop-loss below the low of the pattern to minimize the loss. In our case we have a stop-loss at ₹60.
  
• Book Profits: Set profits based on risk-reward ratio or aim for the next key resistance level. 1:2 is the ideal RR ratio for a bullish harami pattern. We took a near 1:2 target at ₹76.50.

Treat the Bullish Harami as a setup, not a trade. The trade begins only after price confirms the reversal with a bullish breakout.

How to Confirm a Bullish Harami Trading Setup?

There are four important points to check to confirm bullish harami setup. These points include checking confirmation candles, high trading volume, technical level, and use of momentum indicators. Confirmation helps reduce false signals and improves the probability of a successful trade. 

• Confirmation Candle: A bullish harami can be confirmed by the next candle close known as confirmation candle. If the confirmation candle closes strongly above the patterns high, it shows that buyers have now taken control and the trend is more likely to reverse.
  

Third Candle Behavior	Signal Strength	Action
Closes bullish above baby candle’s high	Strong	Consider entering
Closes bullish above mother candle’s midpoint	Very Strong	High confidence entry
Closes above mother candle’s high (breakout)	Extremely Strong	Strong entry signal

• Higher Trading Volume: A confirmation candle breaking the high of the pattern with a strong volume or volume greater than average, ideally be 1.5x or more than the 20-day average volume. Low volume breakouts are usually less reliable.
  
• Formation Near a Strong Support Level: Bullish harami reliability further increases when it appears near a key support level. These support levels could be horizontal, trendline, moving averages or fibonacci support levels.
  
• Momentum Indicator Confirmation: Momentum indicators like RSI and MACD are commonly used to add extra confirmation to the pattern. Bullish harami forming during the RSI oversold conditions support trend reversal after an overextended fall. MACD bullish crossover after a bullish harami formation also adds extra confirmation. 

Can Bullish Harami Setup Fail? 

Yes, bullish harami can fail because just like other candlestick patterns, bullish harami also signals potential reversal not a guaranteed reversal. It does not matter how confirmed the signal you get, if the sellers are strong, they will regain control over the market. There are five major scenarios where a bullish harami pattern fails. These scenarios are briefly discussed below. 

• No Bullish Confirmation: A bullish harami without a strong bullish confirmation candle is more prone to fail. 
• Strong Downtrend: If bullish harami forms in a strong downtrend, the chances are high that the bullish harami will result in only a temporary pause before the downtrend resumes. 
• Forms Away from Support: Bullish harami pattern is only valid after a sustained downtrend. If it forms anywhere randomly in the middle of the trend or in a sideways market, the pattern is then most likely to fail. 
• Weak Buying Volume: If the confirmation candle has a low volume, it signals that buyers lack the strength to sustain the reversal.
• Negative Market Sentiment: Even a perfect bullish harami pattern can fail if the market sentiment gets negative.
  

A bullish harami formed in strong downtrend like trading below 200 or 50 EMA fails at a higher rate compared to bullish harami forms above 200 or 50 EMA. Similarly, if bullish harami forms in RSI oversold condition, but the higher timeframe RSI is also bearish (below 40), the pattern is then more likely to fail. 

How Reliable is Bullish Harami Pattern? 

Bullish Harami is a moderately reliable candlestick pattern. According to Thomas Bulkowski’s study on bullish harami, trading standalone bullish harami without a confirmation candle has a success rate of around 53%, but when traded with market context and confirmation, the success rate jumped significantly. Thomas Bulkowski’s also ranked bullish harami as 25th in frequency out of 103 candlestick patterns, meaning it appears quite often in price charts.

Our Backtesting Results with the Bullish Harami Pattern

We, at Strike Money, manually backtested 100 Bullish Harami patterns on NSE-listed large and mid-cap stocks to evaluate whether the pattern consistently identifies bullish reversals. We found that the standard Bullish Harami pattern delivered a 56% win rate when traded only after a confirmed breakout above the pattern’s high. However, when we added an additional filter of RSI below 30 (oversold) before the pattern formed, the setup became more selective and produced higher-quality trades, with the win rate improving to 65%.

Backtest Setup

Backtest Parameter	Details
Pattern Tested	Standard Bullish Harami Pattern
Market	NSE-listed large and mid-cap stocks
Timeframe	Daily chart
Trade Direction	Long / Bullish setup
Entry Rule	Buy after price closes above the Bullish Harami high
Stop-Loss Rule	Below the Bullish Harami low
Target Rule	Minimum 1:2 risk-reward or next resistance
Confirmation Used	Prior downtrend, bullish confirmation candle, volume, RSI filter
Avoided Setups	Sideways markets, weak confirmation, low-volume patterns

Backtest Logic 

The strategy followed 8 fixed rules.

• Identify a strong prior downtrend.
• Confirm a valid Bullish Harami formation.
• Prefer setups where RSI is below 30 before the reversal.
• Wait for a bullish close above the pattern’s high.
• Enter on the confirmation breakout or pullback.
• Place the stop-loss below the pattern’s low.
• Target the next resistance or maintain at least a 1:2 risk-reward.
• Exit early if a strong bearish reversal appears.

Backtest Result Summary

Metric	Standard Bullish Harami	Bullish Harami + RSI < 30
Total Patterns Tested	100	58
Winning Trades	56	38
Losing Trades	44	20
Win Rate	56%	65%
Average Risk-Reward	1:2.0	1:2.2
Average Winning Trade	6.5%	7.1%
Average Losing Trade	3.5%	3.1%

Key Findings

• Our manual backtest produced a 56% win rate using the standard Bullish Harami pattern.
• Adding an RSI oversold (below 30) filter increased the win rate to 65%.
• Pullback entries offered better risk-reward than chasing the breakout.
• High-volume confirmation further improved reliability.
• Bullish Harami patterns near strong support after extended downtrends outperformed those formed inside ranging markets.
• Sideways markets remained the biggest source of false signals.

What Are the Best Timeframes & Markets to Trade Bullish Harami?

Higher timeframes like daily and weekly are considered to be the best timeframe to trade bullish harami patterns, because it contains less market noise, whereas lower timeframes like 5min or 15 min give frequent signals to trade but most of them turn out to be false signals. 

Timeframe	Best For	Reliability
5–15 Minutes	Intraday Trading	Moderate
30 Minutes–1 Hour	Intraday & Swing Trading	Good
4 Hours	Swing Trading	High
Daily	Swing & Positional Trading	Very High
Weekly	Long-term Investing	High (Less Frequent)

The best markets to trade bullish harami are usually those with a high liquidity. Multitimeframe explanation. 

Does Candle Colour Matter in a Bullish Harami?

Yes, candle colour matters in a bullish harami pattern. The first candle (mother candle) in bullish harami should always be red colored reflecting selling pressure. The second candle (baby candle) should be in green color representing the buyer’s entry. If the second candle also forms red, this pattern usually indicates a pause in selling rather than a bullish reversal.

Can a Bullish Harami Appear in an Uptrend (Pullback)? 

Yes, a bullish harami can appear in an uptrend during the end of a Pullback, making it a useful tool for Trend Trading. Traditionally a reversal signal, if it forms during a Pullback in an uptrend, it suggests that temporary selling is ending, providing a high-probability entry for those engaged in Trend Trading.

Common Mistakes to Avoid While Trading Bullish Harami

There are five common mistakes to avoid while trading bullish harami. The mistakers are briefly discussed below. 

• Buying Without Confirmation: Avoid entering immediately after a bullish harami candle forms. Wait for a confirmation through a confirmation candle, volume, or momentum indicator. 
• Ignoring the Overall Trend: A valid bullish harami forms after a sustained downtrend. Hence, trade bullish harami with the right trend context. 
• Ignoring Trading Volume: If price breaks pattern’s high with low volume, it indicates lack of buyer conviction, hence try to avoid such low probable setups. Look for breakout with more than average volume. 
• Placing Tight Stop-Loss: Keeping very tight stop-loss can result in premature exit due to normal market fluctuation. Place stop-loss a little lower from the patterns low. 
• Risking Too Much on One Trade: Risk only 2-5 % of the total capital, maintaining risk reward and position sizing. 

Difference between Bullish Harami vs Bearish Harami 

The Difference between bullish harami and bearish harami is briefly discussed below in the table. 

Feature	Bullish Harami	Bearish Harami
Trend Before Pattern	Forms after a downtrend	Forms after an uptrend
Signal	Potential bullish reversal	Potential bearish reversal
First Candle	Large bearish candle	Large bullish candle
Second Candle	Small bullish or bearish candle completely within the first candle’s body	Small bullish or bearish candle completely within the first candle’s body
Market Psychology	Sellers are losing momentum while buyers begin gaining control	Buyers are losing momentum while sellers begin gaining control
Confirmation	Price breaks above the pattern’s high	Price breaks below the pattern’s low
Best Trading Opportunity	Buy after bullish confirmation	Sell or short after bearish confirmation

A Bullish Harami signals a potential move upward after a downtrend, while a Bearish Harami signals a potential move downward after an uptrend. They are mirror-image patterns with opposite market implications. 

Bullish Harami vs Other Reversal Patterns 

The Bullish Harami is one of many bullish reversal candlestick patterns. While all reversal patterns aim to identify a potential change in trend, they differ in structure, strength, and the type of market psychology they represent.

The table below compares the Bullish Harami with some of the most popular bullish reversal patterns.

Pattern	Candles	Primary Signal	Strength	Confirmed Win Rate*
Bullish Harami	2	Selling pressure is weakening	Moderate	~53–58%
Bullish Engulfing	2	Buyers overpower sellers	Strong	~63%
Hammer	1	Buyers reject lower prices	Strong	~60% (≈41% standalone)
Morning Star	3	Bearish trend shifts to bullish	Very Strong	~65%
Piercing Line	2	Buyers regain control	Strong	~56%
Tweezer Bottom	2	Support prevents further decline	Moderate–Strong	~58–63%

The above mentioned data is taken from Thomas N. Bulkowski, Encyclopedia of Candlestick Charts. However, the win rate can differ with the change in confluence. 

Bullish Harami vs Bullish Engulfing – Which is Stronger? 

The bullish engulfing is considered to be stronger than bullish harami because it completely engulfs the previous red candle, indicating a strong buying participation.  On the other hand, a bullish harami does not show the same strong buyer participation as a Bullish Engulfing pattern, but instead shows a loss of selling momentum. While a Bullish Engulfing candle completely overwhelms the previous bearish move, the harami suggests a more gradual entry of buyers into the market.