In this article, we will discuss one of the most important and well-known Japanese candlestick patterns. It is considered one of the easiest patterns to spot and is widely used by traders, as it provides strong and clear entry points. This pattern is also known as the “Pregnant Woman” due to its distinctive shape, as we will explain later.
But first, let’s answer some important questions:
What are the conditions for this pattern to form?
Where does it appear on the chart?
What is the psychology behind its formation?
And how can we trade it professionally?
Bearish harami :-
This pattern consists of two candlesticks. The first is a bullish candle with a large body, followed by a second smaller candle, which can be either red or green. The key شرط for the validity of the pattern is that both the opening and closing prices of the second candle must be completely within the body of the first candle.
For this reason, the pattern is called the “Pregnant Woman” due to its clear resemblance in shape. It is also considered the inverse of the bearish engulfing pattern, which was explained in a previous article, where the first candle effectively engulfs the second one.
This pattern is classified as a bearish pattern, as it typically appears at resistance zones and signals a potential shift from an uptrend to a downtrend. It is recommended to wait for a confirmation candle that closes below the entire pattern (below both candles) before making a trading decision.
The psychology behind its formation:
At the end of an uptrend, as the first large bullish candle forms, a smaller candle begins to develop within its body. This second candle can be either red or green, and it reflects the emergence of selling pressure and a weakening in bullish momentum.
The most important condition is that the opening and closing of the second candle must be completely within the body of the first candle, while the wicks are not significant—only the candle bodies matter.
This formation indicates market indecision and the beginning of seller control. Therefore, a confirmation candle that closes below both candles is needed to confirm a more confident entry into a sell trade.
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How to trade using this pattern:
When this pattern appears at a resistance zone within a downtrend, a sell trade can be entered after the pattern is fully formed and a confirmation candle closes below both candles.
The stop loss is placed directly above the pattern, while the targets are set based on a suitable risk-to-reward ratio preferably aiming for three times the stop loss (1:3 RR), as illustrated on the chart.
