What Is a Worked Example of Harami?

Direct answer

A worked example of Harami shows, step by step, how two consecutive candlesticks form the pattern under explicit rules: the second candle’s body sits within the first candle’s body range. Because real charts vary by timeframe, data source, and how precisely you measure “body,” any numeric example only stays valid under the stated assumptions.

Mechanism or definition

In candlestick charting, a candle has a body and (optionally) wicks.

• Body: the price range between the open and close.
• Body range: for the first candle, it is between min(open, close) and max(open, close).

A Harami (two-candle pattern) is commonly described as:

1. There are two consecutive candles.
2. The first candle has a larger body.
3. The second candle has a smaller body whose range lies inside the body range of the first candle.

Worked-example rules (assumptions you must state)

To make an example checkable, assume:

• You are using one fixed timeframe (for example, the chart’s 1-hour candles).
• “Inside” means: second candle body range is fully within first candle body range.
• You measure bodies using only open and close, not wicks.
• You do not use any extra threshold (like “must be at least 50% smaller”) unless you explicitly add it.

Evidence or example

Scenario

Assume you observe the following two consecutive candles on the same timeframe:

Candle 1 (the “parent” body)

• Open = 1.2000
• Close = 1.2100
• Body range = 1.2000 to 1.2100

Candle 2 (the “inside” body)

• Open = 1.2060
• Close = 1.2080
• Body range = 1.2060 to 1.2080

Verification steps

1. Compute Candle 1 body range:
   • min(open, close) = 1.2000
   • max(open, close) = 1.2100
   • So Candle 1 body range is [1.2000, 1.2100].
2. Compute Candle 2 body range:
   • min(open, close) = 1.2060
   • max(open, close) = 1.2080
   • So Candle 2 body range is [1.2060, 1.2080].
3. Check the “inside” condition:
   • Candle 2 low end (1.2060) is above Candle 1 low end (1.2000).
   • Candle 2 high end (1.2080) is below Candle 1 high end (1.2100).
   • Therefore, Candle 2 body is fully inside Candle 1 body.

Under these assumptions, the candles satisfy the basic Harami structure.

How it “works” mechanically (without promising outcomes)

The mechanical idea people use is that the second candle’s smaller body relative to the first can reflect a change in the market’s immediate candle-to-candle pressure. However, this is a descriptive observation about the two candles you selected, not a guarantee about future price movement.

Limitations and risks

1. Definition variability: Some definitions treat “inside” differently (for example, allowing partial overlap, using wicks, or requiring a specific size ratio). Your label depends on your chosen rule.
2. Timeframe and data resolution: A pattern can appear on one timeframe and not on another, because candle open/close values change when you regroup ticks into larger or smaller intervals.
3. Subjectivity in identification: Even with the same rule, borderline cases can be interpreted inconsistently if candles are close to the threshold of “inside.”
4. No information about costs or execution: A chart pattern description does not include spreads, commissions, slippage, or latency; those can materially affect real-world results even if your pattern detection is correct.
5. Historical relationships are not predictive: Seeing a Harami in the past does not establish that the next occurrence will behave the same way.

Verification or next question

To independently verify Harami in any example you find, apply the same mechanical test: fix the timeframe, define candle body as open-to-close, compute each body range, and check whether Candle 2’s body range is fully within Candle 1’s body range. If you want to go further, test sensitivity by repeating the check using alternative definitions (for example, “inside including wicks” or a stricter body-size ratio) and observe how often your pattern label changes.