CANDLESTICKS

Page 6

Tweezer Tops and Tweezer Bottoms:

The tweezers are dual candlesticks reversal patterns. This type of candlestick pattern could usually be spotted after an extended uptrend or downtrend, indicating a reversal is soon to occur. Notice how the formation looks just like a pair of tweezers.

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The most effective tweezers have the following characteristics:

  • The first Tweezer candle is the same as the overall trend, if price is moving up, then the first candle should be bullish/ green (as displayed in the above left image)

  • The second candle is the opposite of the prevailing trend. If price has been moving up, then the second Tweezer candle should be bearish/ red. (as displayed in the above right image)

  • The shadows/ wicks of the candles should be of equal length. Tweezer tops should have the same highs (roughly) while Tweezer bottoms should have the same lows.

(Tweezer tops/bottoms are high probability price action reversal patterns that can be found on a range of timeframes. This setup is as powerful as the shooting star as it gives a clear indication that the price tried to reach higher on two occasions but was rejected, forming a clear point of resistance. These are best when traded from a point of previous resistance with a stop loss placed 10 PIPs above/below the shadow/wick highs or lows.

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