What is harami?

Harami is a Japanese term that refers to a two-candlestick pattern that implies a potential trend reversal. Harami consists of an initial candlestick that has a long body, followed by a smaller-bodied candlestick that is completely contained within the range of the first candlestick. The second candlestick could be bullish or bearish. Harami means "pregnant" in Japanese, as the second candlestick is thought to be "nurturing" inside the larger body of the first candlestick. Harami is usually seen as a sign of indecision among traders and may signal a trend reversal or a continuation of the current trend, depending on the market conditions. Traders often use other technical analysis tools and indicators to confirm the potential reversal signaled by the Harami pattern before making trading decisions.