Bearish Harami Short Entries with Pip-Based Exits
Summary
The document describes a short-only strategy based on the bearish harami, a two-candle pattern in which a smaller second real body lies inside the preceding larger body. The illustrated condition requires the first candle to rise, the next to fall, the second body to fit within the first, and the second body to be smaller. A minimum body-size input filters out smaller patterns, and the second candle’s close is used as the reference price for the trade.
The script enters short when the pattern is recognized and manages the position with configurable pip-denominated take-profit and stop-loss levels. Its code also colors bars to mark patterns and position states. The document offers a rule definition and implementation, but no trade statistics, market, timeframe, spread assumptions, or evidence that the setup has an edge. The pip settings may need adjustment to the traded instrument, and the source warns that the example is educational. Backtest results cannot be inferred from the strategy name alone.
Key ideas
- A bearish harami is identified when a smaller candle body sits within the prior candle’s larger real body.
- The example requires a rising first candle and a falling second candle for its short signal.
- A configurable minimum body size filters the pattern, and the second candle’s close anchors the exit levels.
- Take-profit and stop-loss distances are specified in pips.
- The document provides no performance results or context for evaluating the strategy across markets.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.