Here is an example of Harami with RSI filtering and SMA(20) as Take Profit Target, when during the course of a decline the appearance of a Harami pattern filtered by RSI at the oversold area.
One could consider buying when the next candle exceeds the high price of the long black candle.
Place a protective stop loss at the bottom of the Harami pattern.
You can consider the following actions, bearing in mind that a Take-Profit strategy is heavily dependent on the trading profile of each individual.
- Close the position when the price reaches the SMA(20).
- Close 50% of the position when price travels 100% the length of the Harami
pattern then close the remaining 50% when price reaches the SMA(20).
- Other combinations may be applied.