Harami Candles

[spyder9000]

I've been noticing that Harami Candles (also known as "inside day" candles) often signal a huge move in volatility in either direction.

Does anyone know of an EFS that alerts after the formation of a Harami?
Here's an example of what it is:

http://share.esignal.com/ContentRoot/Spyder%20Screen%20Shots/INTC2.doc

So basically its a candle that has just formed...which has a high value and a low value that are BOTH below the high value and the low value of the candlestick immediately before it.

If there's no such EFS, can anyone advise on how to capture the high and low and reference the prior candle.

Thanks.

[Guest]

Re: Harami Candles

Hi spyder9000,

Not sure about a specific efs that is posted, but referencing previous bar values is straightforward. Check out the EFS Glossary or EFS KnowledgeBase (both links below) and look at the open,high,low,and close series.

Originally posted by spyder9000
I've been noticing that Harami Candles (also known as "inside day" candles) often signal a huge move in volatility in either direction.

Does anyone know of an EFS that alerts after the formation of a Harami?
Here's an example of what it is:

http://share.esignal.com/ContentRoot/Spyder%20Screen%20Shots/INTC2.doc

So basically its a candle that has just formed...which has a high value and a low value that are BOTH below the high value and the low value of the candlestick immediately before it.

If there's no such EFS, can anyone advise on how to capture the high and low and reference the prior candle.

Thanks.

[spyder9000]

Steve,

Whats up...thanks for the reply.
Got the framework for referencing prior candles:


if(getBarState()==BARSTATE_NEWBAR){

if(vRSI.getValue(RSIStudy.RSI,-2) < 30 &

Now obviously thats for an RSI study that I use....but do you know how to compare the HIGH to the HIGH and the LOW to the LOW?

Seems easy enough, but I just can't code the rest of it.

You seem like you know your way around the file sharing....and I KNOW there must be other EFS out there that capture different candlestick formations...not just the Harami.

Let me know your thoughts.

[Guest]

Hi spyder9000,

Here are excerpts from the EFS Glossary and EFS KnowledgeBase that I previously referenced (both links below at the bottom of this post).

close(-1); gets the next-to-last close for the current symbol
high(-1); gets the next-to-last high for the current symbol
low(-1); gets the next-to-last low for the current symbol
open(-1); gets the next-to-last open for the current symbol



In my fileshare is a pivots efs that has conditionals that compare prices using these methods. Look at this please.


Finally, here are three links to references that discuss and describe how to code comparison conditionals in javaScript. Please look at these as well.

http://kb.esignalcentral.com/display/2n/kb/article.asp?aid=1919&n=1&s=

http://www.w3schools.com/JS/js_comparisons.asp

http://www.webcheatsheet.com/javascript/if_else_switch.php

I'm sure you will be able to figure this out if you take time to look at the references I have provided.

Originally posted by spyder9000
Steve,

Whats up...thanks for the reply.
Got the framework for referencing prior candles:


if(getBarState()==BARSTATE_NEWBAR){

if(vRSI.getValue(RSIStudy.RSI,-2) < 30 &

Now obviously thats for an RSI study that I use....but do you know how to compare the HIGH to the HIGH and the LOW to the LOW?

Seems easy enough, but I just can't code the rest of it.

You seem like you know your way around the file sharing....and I KNOW there must be other EFS out there that capture different candlestick formations...not just the Harami.

Let me know your thoughts.

[spyder9000]

Hey Steve,

Thanks for that...I'm almost done with my EFS, your pivot one was extremely helpful.

Lots of views here, but not many replies?

Well I'll continue by sharing some Harami trades I initiated the last 2 weeks or so.
I think its a good illustration.
You'll notice that some of the Harami candles exceed the prior candle by a few cents. I ignore this only as long as the body of the candle stick is contained within the prior.

Long:

http://share.esignal.com/ContentRoot/Spyder%20Screen%20Shots/LONGS.doc

Short:

http://share.esignal.com/ContentRoot/Spyder%20Screen%20Shots/SHORTS.doc

Still in the Intel trade from a while ago....that illustration is at the beginning of this thread.

I'd sure be interested in replies from anyone that uses the Harami to trade on an intra-day basis.

[kevinbaker]

Yes I believe the Harami works extremely well on an intra-day basis as well.
Obviously you will get far more signals than you do on daily charts (per your examples) but if you filter them out, and combine them with other technical indicators, then you'll definitely have an edge to profitable trading.
I've been using the Harami as well as the Doji in my trading, very frequently.
I'll try to post some examples if you don't mind.

[Guest]

Hi spyder9000,

You are most welcome, the efs used conditionals that were constructed in a building block fashion. In hindsight, that could work out very nicely for candlestick patterns. thanks for the nice note.

Originally posted by spyder9000
Hey Steve,

Thanks for that...I'm almost done with my EFS, your pivot one was extremely helpful.

[Guest]

Hi kevinbaker,

That would be great if you could put together some example code. Quite a nice offer.

Originally posted by kevinbaker
Yes I believe the Harami works extremely well on an intra-day basis as well.
Obviously you will get far more signals than you do on daily charts (per your examples) but if you filter them out, and combine them with other technical indicators, then you'll definitely have an edge to profitable trading.
I've been using the Harami as well as the Doji in my trading, very frequently.
I'll try to post some examples if you don't mind.

[Doji3333]

It really depends on the conditions of the harami. If you set it up correctly, then you may be able to hit 80%+ accuracy. If not, total failure.

The harami is in interesting pattern in the sence that it represents a "coiling of a spring". It will "pop" eventually, but which side??

Basic Harami's can be profitable, but it takes more than basic harami patterns.

[spyder9000]

Kevin did you get a chance to put some examples using intra-day data?

Here is just a beautiful Harami candle setup on the SPY (SP 500 ETF).

http://share.esignal.com/ContentRoot/Spyder%20Screen%20Shots/spy.doc

While I do a lot of trading intra-day, I've only recently begun to incorporate the Harami filter as a trigger to enter a trade. Here are the steps I use.

1. Identify the trend
-As you can see, the SPY started to trend down 2 hours into the session

2. Pick a low risk entry point
-Using Bollinger Bands, you can see the BB squeeze forming, so you know a breakout is coming. The direction of the breakout has been identified in Step 1

3. Use the Harami as your trigger.
-A break of the Harami low is your entry...and your stop goes on the break of the Harami high.

Result: About 75 cents (or 7 points if you trade futures)
Esignal does a FANTASTIC job in illustrating the Bollinger Band Squeeze along with Harami alerts.

More examples to come.