Bearish Harami Cross Pattern
The Bearish Harami Cross is a candlestick pattern that signals a potential reversal from a bullish trend to a bearish trend. It is similar to the Bearish Harami pattern but involves a Doji instead of a small bearish candle as the second candle, making it a stronger indicator of indecision and potential reversal.
Characteristics of the Bearish Harami Cross Pattern:
- First Candle: A long bullish (green or white) candle that forms during an uptrend.
- Second Candle: A Doji candle (where the open and close prices are almost the same), which fits entirely within the body of the first bullish candle.
- Signal: The appearance of the Doji indicates market indecision, suggesting that the upward momentum is weakening and a reversal to a bearish trend might occur.
The Bearish Harami Cross is considered a stronger signal of a trend reversal compared to the standard Bearish Harami pattern due to the presence of the Doji, which reflects a greater level of uncertainty in the market.
Identifying the Bearish Harami Cross Pattern
To analyze and identify the Bearish Harami Cross pattern, follow these steps:
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Load the Chart for the Asset:
- Open the platform.
- Load the chart for the specific asset or instrument you want to analyze.
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Set the Timeframe:
- Choose an appropriate timeframe that fits your analysis needs. Daily or longer intervals are recommended for spotting reliable candlestick patterns like the Bearish Harami Cross.
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Select Candlestick Chart:
- Ensure that the chart type is set to “Candlestick” to visualize the patterns clearly.
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Use the Pattern Recognition Tool:
- Click on the FX Study section on the platform.
- Navigate to the Candlestick Pattern menu.
- Select the Bearish Harami Cross Pattern from the list of available candlestick patterns.
- The platform will automatically highlight all instances of the Bearish Harami Cross on your chart, making it easier to spot potential trend reversals.
Use Case
The Bearish Harami Cross is a two-candle pattern consisting of a large bullish candle followed by a doji that forms entirely within the prior candle’s body. The doji signals uncertainty, and within an uptrend context, it suggests the upward momentum may be exhausted.
Strategy
Enter short after the pattern forms at a significant resistance level when the next candle confirms bearish direction by closing below the doji’s low. Set stops above the large bullish candle’s high. Target the next support level.
Common Mistakes
Do not trade Bearish Harami Cross without a confirming candle. Avoid relying on it as a standalone signal without checking resistance levels and oscillator readings. Do not use in strongly trending markets where momentum often overrides single reversal patterns.