A bullish harami followed by a third candle that closes above the first candle's open, confirming the pause has turned into a turn.
Sequence: a long red candle, a small candle contained within its body (harami), then a green candle closing above the high of the small candle and above the first candle's open.
The third candle is the whole point. It converts an ambiguous contraction into a confirmed reversal by proving buyers can reclaim the range of the down candle.
It is one of the better-regarded candlestick sequences precisely because it has built-in confirmation, but the cost is entry price: you are buying after three candles of recovery. Compare the distance to your stop, below the pattern low, against a realistic target before taking it. The mirror pattern, three inside down, applies at tops.
Original diagrams for the ideas on this page. Illustrative, not real market data.
The parts of a candlestick. One candle sums up a slice of time: the thick real body runs from the opening price to the closing price, and the thin wicks reach out to the highest and lowest prices traded. Colour tells you which way the body ran.
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