Getting a nice buy signal on the bullish harami

Figure 7-5 is a chart of the futures contract that trades on the Australian dollar. The bears push the price down from the open until the close for eight days in a row. Finally, on the signal day of the bullish harami, the bulls find a level where they're ready to start buying. This day is the first of many days where the bulls push prices back up from the depths where the bears had pushed them.

Notice in Figure 7-5 that the high of the signal day is a little higher than the setup day. This example helps me make the point that the bullish harami is just the opposite of the bullish engulfing pattern. (See the earlier section entitled "Bullish engulfing pattern".) With a bullish engulfing pattern, all four price components of the candlestick are involved, but only the open and close matter when you're working with a harami.

Figure 7-5:

A bullish harami on a chart of the Australian dollar futures.

Figure 7-5:

A bullish harami on a chart of the Australian dollar futures.

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