Harami Cross

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Definition of 'Harami Cross'

A Harami Cross is a type of candlestick pattern used in technical analysis of financial markets. It typically appears on a chart during a trend and is formed by two candlesticks. The first candlestick is a long candlestick, while the second is a small candlestick that has a small range and is completely contained within the body of the first candlestick.

The Harami Cross pattern suggests that the trend may be losing momentum and that a potential reversal may be on the horizon. The small size of the second candlestick indicates that there is indecision in the market, with neither the bulls nor the bears being able to take control. This indecision may signal that a potential reversal could be imminent.

The Harami Cross pattern can be either bullish or bearish, depending on the direction of the trend. A bullish Harami Cross pattern appears during a downtrend and suggests that the bears are losing control, while a bearish Harami Cross pattern appears during an uptrend and suggests that the bulls are losing control.

Traders often use the Harami Cross pattern as a potential signal to buy or sell, depending on the direction of the trend and other technical analysis tools and indicators. However, it is important to note that the pattern should be used in conjunction with other analysis methods to confirm the potential reversal and to make informed trading decisions.

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