Two Candlestick Pattern based on its Positioning

Based on position of the second candle we have two types of patterns –

(1) Star Position – The second candle gaps away (Gap up or gap down) from the first candle is called to be in Star position. The Star candle appears isolated from the price action due to gap     up/down.

First Candlestick –  Ideally should have large real body with or without shadows, but not always true.

Second candlestick  – The second candlestick which is in Star position, should have a small real body. The size of shadows doesn’t matter much.

Real body of both the candlesticks– They can be any combination of red  and green candlesticks.

Dojis, Hammers, Shooting stars, Hanging Man, Spinning Tops have small real body and hence they can be in  Star position.

harami candlestick

(2) Harami Position – Harami means “pregnant” in Japanese language.

A candlestick that forms within the real body of first candlestick is said to be in Harami position.

Since the second candlestick with small body is enclosed within the body of large candlestick like a pregnant woman with her foetus in womb, hence it is called to be in Harami Position.

Dojis and Spinning Tops which have small real bodies can be form in Harami position.

two candle pattern

When the second candle is Doji in Harami position then it’s often called as Harami Cross.

Harami Cross

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