Bullish Harami + Confirmation Candle = Serious Business -- with David Moadel
hey everybody welcome to looking at the markets with David Modell before I get
started with the bullish harami and Confirmation pattern I want to thank
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you so much for doing that all right so the bullish harami I know this picture
has the bearish harami as well just to show you the difference and I do have a
video explaining the basics of the bullish and bearish bearish harami
patterns and so I'll put that link in the description below this video if you
want to learn the basics first this is more of an intermediate video it's like
the next step I believe in looking looking for confirmation can be a good
idea okay because you don't necessarily just want to depend on a two candlestick
pattern to decide oh well this is bullish you know just because two
candlesticks happen a certain way doesn't necessarily mean that the next
candles are going to be straight up alright it doesn't work like that very
consistently necessarily so you can look for confirmation but what does that look
like alright first a quick review again this is not going to be an in-depth
review click on the other video the basic one that I did if you want the the
more comprehensive review bullish harami pattern just real quick is we're just
looking at the bodies okay we're not looking at the wicks and a bullish one
is at the end of a downtrend so you have a you have some candles going down down
down down and then you got a bigger red one okay so it opens here and then
closes here just looking at the body not the wicks but then after that you have
another one where it gaps up okay and then goes up so it's going to be a green
candle it does not go up above the top of the previous candle but it still goes
up okay and that seems bullish it's not super bullish okay I'm not going to use
these two candles that's not really enough by itself most of the time to
tell me oh well the next candles are going to be green green green up up
in a way okay it's not like it closed way up here or something okay but it's
somewhat bullish it kind of tells me that maybe that's the end of the
downtrend maybe the Bulls are ready to take charge
and take control okay and so the green the body of the green candle is going to
be entirely contained within the body of the red candle before it and so that's a
bullish harami just the basic version of it okay
and by the way the bearish harami if you're curious you know it's probably
going to be at the end of an uptrend you get a big green candle but then a red
candle after that contained entirely within the green candle okay and so you
got you got a gap down and then just keeps going down but not all the way
below this point over here the the bottom of the green candle preceding it
anyway that's that's the bearish but today we're talking about the bullish
one all right so you want to look for some confirmation probably after this
adieu candle patterns not enough and so what I usually look for after that I
want to see a strong green candle one that closes at least above the body here
if it closes above the wick as well that's even better
if it's got some volume look for the volume on the candle that's oftentimes
below the candle you'll see the volume bars if it's a nice big green volume bar
that's encouraging but I'm probably am looking for a candle to close above the
top of the the body here on the red candle that precedes it okay so it may
be the next candle or it may take a while you may have two three four or
five candles before then you get that big green candle that closes above on
strong volume preferably and that could be your confirmation to get in with a
long position because again this two candle pattern here it's not like this
candle closed way up here okay it just kind of it's an inside bar as they say
compared to this one all right and so it's mildly somewhat bullish but
probably not not necessarily enough by itself right so I'll show you what that
looks like all right so you got down down down right big green candles but
then you get an inside candle here okay as you can see it may be hard to see but
it is within see it's not always gonna be textbook is it where the the green
candle is exactly in the middle of the red candle right sometimes it's gonna be
a little bit to the you know closer to the bottom closer to the top as long as
it's within though all right it's not always like a textbook all right in fact
let me let me home in on this let me let me make it bigger okay to show you what
that looks like can you see you know what I'll make it even bigger for you
there we go let me let me really show it okay so you had down down down and then
can you see how this green candle is can is contained entirely within this red
candle okay yes it's closer to the bottom I'd like to have seen it closer
to the top sure or at least in the middle but hey technically this counts
this counts okay but it's not super bullish all right and so I want to see
something close above there above the top of that red candle that's what I'm
looking for okay does it happen with the next candle no the next one no next one
no what about this one this is where it gets interesting see you might want to
wait for the candle to close you might want to want to wait for the end of the
period okay the end of that candle all right and these are one-minute candles
on Apple stock by the way but this this is just math these are just candle
shapes so it could be applied to other time frames as well you know one-hour
candles or five-minute or or even daily one-day candles all right it's just
about the shapes it's not about necessarily the timeframe all right so
look at this look at this fake out look at this head fake okay so it might be
wise to wait until the candle see where it closes okay cuz look we're looking
for something a preferably above the top of this one closing above it okay and
this one had a big long upper wick can you see it it went up up up all the way
up here and if you got in too early you might have thought oh I'm gonna get in
here because it looks like it's probably gonna close above here but look at that
came right back down and didn't did not close above this
head fake look at that wick their head fake watch out for those you can be
patient you can wait for the candle to close before you make a decision okay
I mean it's looking good but maybe not enough confirmation maybe not above this
one yet and look at the next one went down right but what about this one
BAM there it is I mean that's conviction okay I I did not put the there wasn't
room for me to put the the volume up here okay but I'm gonna guess with the
size of this candle that there was a pretty good volume okay but you can look
at the volume look for a big green volume bar as well for even better
confirmation but look at that look at that candle okay no lower wick it you
know and it closed there's a little bit of an upper wick but it closed almost at
the high of the day I mean it opened here or our high of that I guess it's
that high of that minute because these are one minute candles all right but it
opened here's the beginning of that minute of that period and then just no
lower wick so it just went up up up up and at the end of that minute almost it
almost closed at the high all right so that's conviction clearly above here
above that red candle the top of the red candle and so that if you were looking
for confirmation I mean this is it this is what confirmation looks like alright
so then what happened after that well let's uh let's pull out of you know
let's see if I can do a little bit of a magic here I'm on trading view by the
way I want to give them credit look at that so if you if you bought here you
would have done up up and away okay up up up nice just kept on going up way up
alright look how far it went my goodness alright am I saying it works like that
every single time no way okay this does not work a hundred percent of the time
but confirmation like we saw with this Apple example can make you feel better
about it you can look for the volume for even more confirmation you can use other
indicators for even more confirmation and you can look at the shape of the
candlestick alright when there's no lower wick that's oftentimes a good sign
that means that you they didn't bring it down at all okay
that means it just started here and just kept going up when there's no upper wick
you know because with an upper wick look at that head fake right fake out all
right but when there's no upper wick that mean that means for that period it
just started and kept going up and closed at the high there was very little
downtime during that that period there that candle all right so there's those
are things you could look for if you want to add some moving averages if you
want it to go above a certain moving average as well you can use that you can
use moving average cross overs or whatever you like MACD RSI stochastics
whatever conformation you like but this is one way to confirm without using
other indicators necessarily okay just by looking at the shapes of the candles
maybe add the volume bars as well if you want to add that all right so hey I hope
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