The candlestick trading bible

39
THE CANDLESTICK TRADING BIBLE 
In the next chapters, i will talk about it in details, and i will show you 
step by step how to make money trading this price action pattern. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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40
THE CANDLESTICK TRADING BIBLE 
The Harami Pattern (the inside bar) 
The Harami pattern (pregnant in Japanese) is considered as a reversal 
and continuation pattern, and it consists of two candlesticks: 
The first candle is the large candle, it is called the mother candle, 
followed by a smaller candle which is called the baby. 
For the Harami pattern to be valid, the second candle should close 
outside the previous one.
This candlestick is considered as a bearish reversal signal when it 
occurs at the top of an uptrend, and it is a bullish signal when it occurs 
at the bottom of a downtrend. 
See an example below: 

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41
THE CANDLESTICK TRADING BIBLE 
As you see the smaller body is totally covered by the previous mother 
candle, don’t bother yourself with the colors, the most important is 
that the smaller body closes inside of the first bigger candle. 
The Harami candle tells us that the market is in an indecision period. 
In other words, the market is consolidating.
So, buyers and sellers don’t know what to do, and there is no one in 
control of the market.
When this candlestick pattern happens during an uptrend or a 
downtrend, it is interpreted as a continuation pattern which gives a 
good opportunity to join the trend. 
And if it is occurred at the top of an uptrend or at the bottom of a 
downtrend, it is considered as a trend reversal signal.
Look at another example below: 

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