Double Harami / 両はらみ線
Reference values based on Bulkowski's "Encyclopedia of Chart Patterns". Data is primarily from U.S. markets and may differ for other markets.
A three-candlestick pattern where the central large candle (second) contains both the small candles (first and third) within its body. It indicates deep indecision among market participants and represents a state of directional uncertainty. It is important to confirm the breakout direction before entering.
After the third small candle is confirmed, enter in the direction of a breakout above the second candle's high or below its low. Long on an upward break, short on a downward break. Standing aside until direction is confirmed is the safest approach.
Project the range of the second large candle (high to low) in the breakout direction to determine the price target. This targets the expansion following the contraction of the double harami.
Place a stop-loss slightly beyond the opposite end of the second large candle from the breakout direction (below the low for long positions, above the high for short positions).
Volume typically decreases on the first and third candles and increases on the second candle. Extremely low volume on the third candle increases the probability of a breakout on the following candle.