What is the Tweezer Candlestick Formation
The Tweezer Candlestick formation helps identify short-term bearish and bullish reversals in the market. By using the Tweezer Candlestick pattern, you can analyze the ideal buying and selling price points in the market. In our article, we will learn about the Tweezer Candlesticks pattern in depth.
Understanding the Tweezer Candlestick formation?
The Tweezer Candlestick formation is a reversal pattern that indicates either a market top (strong uptrend) or market bottom (strong downtrend). It provides traders with a bearish to bullish reversal point in a downtrend and bullish to bearish reversal point in an uptrend. The formation consists of two or more candlesticks, with alternative colors, that touch the same price top or bottom one after the other. The first candlestick that appears has a larger body than the second candlestick.
- The tweezer top pattern consists of a candlestick body, which is the difference between the open and close price
- The lower wick in the candlestick refers to the market low
- The upper wick in the candlestick refers to the market high
- A red candlestick (bearish candlestick) signifies that the close price was lower than the open price
- A green candlestick (bullish candlestick) signifies that the close price was more than the open price
Types of Tweezer Candlestick formation
1. Tweezer Top Candlestick
Tweezer Top Tweezer Candlestick patterns are a bearish reversal pattern that occur when two or more candlesticks touch the same high price level in the market consecutively. The pattern starts with a green (bullish) candlestick in an uptrend and opens on the second day, touching the previous day’s high, slowly followed by a red (bearish) candlestick, reversing into a downtrend. At this point, traders receive an exit or sell signal in the market due to the expected market fall. Once the market reverses, traders can place short orders to trade in the falling market.
2. Tweezer Bottom Candlestick
The Tweezer Bottom Candlestick is a bullish reversal pattern that occurs when two or more candlesticks touch the same low price level in the market consecutively. The pattern starts with a red (bearish) candlestick in a downtrend and opens on the second day, touching the previous day’s low, slowly followed by a green (bullish) candlestick, reversing into an uptrend. At this point, traders receive an entry or buy signal in the market due to the expected market rise. At this point, traders can place long orders to trade in the rising markets.
Tweezer Candlestick strategies
1. Hammer Candlestick strategy
The Hammer Tweezer Candlestick strategy is used during an end of an uptrend and provides ideal exit signals. It consists of candlesticks with a short body, either a very short or no upper wick, and a very long lower wick which is twice the size of the candlestick’s body. The candlesticks always have a long lower wick, indicating a downtrend reversal. When there are two or more candlesticks with the long lower wick, the pattern confirms a strong downtrend market reversal signal, indicating traders to either exit the market or short their trades.
2. Dark-Cloud Cover Strategy
The Dark Cloud Cover Tweezer Candlestick strategy is also applied as an uptrend ends. It is a bearish reversal pattern that consists of two candlesticks and identifies sell signals. The first candlestick in this pattern is a green (bullish) candlestick with a large body, followed by a red (bearish) candlestick with a comparatively shorter body. The second candlestick opens at a price level higher than the previous day and closes at a level below that of the previous day, signalling a market trend change. Since it is a downtrend reversal signal, traders can place sell or short orders in the market to trade along with the falling markets.
3. Engulfing strategy
The Engulfing Tweezer Candlestick strategy is a reversal pattern that appears at either an end of a downtrend or uptrend. It helps traders identify both entry and exit signals in the market. The first candlestick in the Engulfing pattern has a small body and the second one has a comparatively larger body. If the first candlestick is green (bullish) and the second is red in colour, it means that the market is expected to reverse and fall (downtrend domination). If the first candlestick is red (bearish) and the second is green in colour, it means that the market is expected to reverse and rise (uptrend domination).
- If the Engulfing Tweezer pattern occurs during the end of an uptrend, it is a bearish reversal signal and provides traders with exit and sell opportunities
- If the Engulfing Tweezer pattern occurs during the end of a downtrend, it is a bullish reversal signal and provides traders with entry and buy opportunities
4. Belt Hold lines strategy
The Belt Hold Lines Tweezer Candlestick strategy determines the market sentiment through a single candlestick. It helps traders identify market uptrends and provides them with ideal market entry points accordingly. This strategy can be applied in both bearish and bullish markets. The Belt Hold Line strategy consists of either a red (bearish) or green (bullish) candlestick that opens near the previous day’s high and closes near the previous day’s low price, respectively. The longer the candlestick, the higher the chance of the market reversing.
- When the Belt Hold pattern appears during an uptrend, it is a top reversal pattern that signals traders to place short or sell orders and exit the market due to the potential future market price fall
- When the Belt Hold pattern appears during a downtrend, it is a bottom reversal pattern that signals traders to place long or buy orders and enter the market due to the potential future market price rise
Trade with the Tweezer Candlesticks to identify market reversals
The Tweezer Candlestick patterns help traders identify significant market reversals and place buy and sell orders accordingly. Start trading with Blueberry Markets to leverage the power of these trading strategies with a seamless trading experience. Sign up for a live trading account or try a risk-free demo account on Blueberry Markets.
Recommended Topics
-
Top Pivot Point Strategies
Pivot point analysis can predict not only price movements but also help time entries and exits correctly to develop a risk management strategy.
-
How to Use The Bill Williams Indicator
Bill Williams Indicator is helpful in analysing trending markets, reversals and momentum.
-
How to Use Relative Vigor Index in Forex
The Relative Vigor Index (RVI) is a technical analysis indicator that helps measure a trend’s strength in forex trading.
-
Technical Trading Strategies for Day Traders
Technical trading strategies for day traders include technical analysis tools to identify short-term trading opportunities in the market.
-
How to Use The Force Index Indicator in Forex?
The Force Index indicator combines the currency pair’s price and volume to determine the power of bulls and bears in the market.
-
The Ultimate Guide to Trading Trends in Forex
Trading trends in forex provides you with opportunities to identify the strong market direction and enter an order accordingly.
-
MT5 Indicators Every Trader Should Know
MT5 is a forex and stock trading platform that enables traders to place automatic orders.
-
What is Volume Trading Strategy
Volume trading in forex is all about trading currency pairs with high buying or selling pressure.
-
Top Low Spread Scalping Strategies For Forex Traders
Scalping strategies allow traders to leverage on the small price changes in the forex market to turn the trends in their favour.
-
What is Forex Currency Swap?
Forex currency swap helps reduce foreign borrowing costs and mitigate exchange rate risks.
-
What is Forex Spot Trading
With forex spot trading, one can make significant short-term profits by trading at prevailing prices.
-
How to Short Sell a Currency
Short selling enables traders to place lucrative forex orders even in a falling market.
-
How to Use The Chaikin Money Flow Indicator
The Chaikin Money Flow indicator provides future market direction by analysing the strength of the market trend and underlying buying or selling pressures.
-
What is Momentum Trading? Top Momentum Trading Strategies
Momentum trading leverages market volatility to the trader’s advantage by identifying the strength of the market’s current trend.
-
How to Trade With VWAP Indicator in Forex
The Volume Weighted Average Price (VWAP) helps eliminate any unwanted price fluctuations during the trading period.
-
5 Top ADX Trading Strategies
The Average Directional Movement Index (ADX) strategy measures the forex market’s overall strength.
-
How to Identify a Trend in the Forex Market
Identifying market trends in forex is also helpful in understanding if your trading strategy is going as per plan and where you can improve.
-
Forex Trading Robots: How Do They Work?
Forex trading robots make multitasking possible by processing multiple conditions like order entries/exits and entering stop loss orders automatically.
-
What Are Momentum Indicators in Forex
Momentum indicators measure how strong the price change is in the currency pairs.
-
How to Use Gator Oscillator For Forex Trading
Gator Oscillator helps in identifying a trending or consolidating market.
-
What is The Exponential Moving Average
Exponential Moving Average (EMA) helps in understanding the market’s trend direction.
-
Top Forex Volatility Indicators
Forex volatility defines the risk an investor takes in the market. The higher the volatility, the greater the risk and the higher the potential returns.
-
How to Use Forex Market Sentiment Indicators
Sentiment indicators in the forex market indicate extremely volatile market conditions.
-
How to Use The Hanging Man Candlestick Pattern For Forex Trading
The Hanging Man Candlestick pattern provides downtrend reversal signals, which helps traders place sell or short orders to profit off falling markets.
-
How to Add MT4 Indicators
MetaTrader 4 comes with several built-in and custom indicators to boost your trading strategy.
-
Top MACD Trading Strategies
Moving Average Convergence Divergence (MACD) strategies enable traders to measure market momentum and trend strength.
-
Top Indicators for MT4
MT4 indicators help analyse forecasted currency pair prices and place exit or entry orders accordingly.
-
How to Trade Bullish and Bearish Divergences
Bullish and bearish divergences enable you to trade market reversals.
-
Top Support and Resistance Indicators
Support and Resistance indicators identify price points on the forex chart where the markets can potentially reverse.
-
What is The Donchian Channel Indicator
The Donchian Channel indicator can determine volatility and potential breakout signals in the market.
-
How to Install MT4: A Beginner's Guide
MetaTrader 4 (MT4) is a powerful forex trading platform with a user-friendly interface and advanced analytical tools for automating trading.
-
What are Trendlines in Forex Trading?
Trendlines in forex provide clear market signals for placing long or short orders.
-
Market Order vs Limit Order
Market and Limit orders help execute automatic trading transactions, as per your trading preferences.
-
Bearish and Bullish Markets
In the trading world, it is essential to be aware of the bull and bear market trends because they define the direction of the market
-
How to Read Trading Charts
Trading forex live charts can help identify ongoing market trends, which can help you place successful traders.
-
Top Reversal Patterns For Forex Trading
Reversal patterns provide traders with price levels at which the market can potentially reverse.
-
How to Find The Best Forex Trading Signals
Forex trading signals are important market triggers that provide traders with ideal entry and exit price levels in the market.
-
Top Forex Trading Strategies That Actually Work
Trading in forex, you will come across several forex trading strategies -- some more complex than the others. It is immensely crucial to start forex trading with the right strategy.
-
Scalping vs Swing Trading: What’s the Difference?
Every forex trader has a different purpose, objective, time constraints, and investment capital. The right forex trading style for you depends on your main trading goals and requirements.
-
What are Volume Indicators
Volume in the forex market can be used to determine the upcoming market trends. Volume indicators are forex trading indicators that can identify if the volume for a particular currency pair is high or low, providing traders with market continuation and reversal signals
-
Shooting Star Candlestick Pattern
The Shooting Star Candlestick Pattern can identify bearish market reversals and provide traders with ideal price levels to short or exit the trade.
-
Top Trading Chart Patterns
Predicting future currency pair prices help in confirming market continuation and reversal signals.
-
What is Slippage in Forex Trading?
Slippages occur when a currency pair order is executed at a price different from the set market order price.
-
Buy limit vs Sell Stop Orders in Forex
Placing buy limit and sell stop orders help employ a price control strategy on forex trades. Let's take a look at buy limit vs sell stop orders.
-
The Best Time Frame For Forex Trading
A time frame is a designated time period where forex trading takes place. Time frames can be measured in minutes, hours, days, weeks, months and years.
-
Top Technical Indicators in Forex
Technical indicators are a market direction signal based on the current and historical price movement of a currency pair that provides traders with future price expectations
-
Top Continuation Patterns
A continuation pattern indicates if the current market trend is going to continue in the same direction or not
-
How to Ace Divergence Trading in Forex
The forex market is all about timing your trades well. Divergences give traders a market reversal signal right before a price trend changes
-
How To Trade Forex With Japanese Candlesticks?
A Japanese Candlestick is a technical analysis tool used to analyze the currency pair’s price movement in the forex market.
-
Top Momentum Indicators To Analyse Trend Strength
Momentum indicators are technical analysis tools that determine in which direction the market is headed and how strong or weak the ongoing trend is
-
Types of Moving Averages Every Trader Should Know
Moving Average is a technical indicator which averages out currency pair prices in a specific time period in order to accurately identify market trend reversals and support-resistance levels.
-
8 Popular Intraday Trading Indicators
Intraday Trading Indicators help place successful short-term trade orders in the forex market.
-
Average Directional Index
The ADX is a strength indicator that measures how strong or weak a particular market trend is.
-
How to Use Elliott Wave Theory For Forex Trading?
The Elliott Wave Theory analyses a currency pair’s long-term price movement in the forex market.
-
What are Pivot Points in Forex
Pivot Points help traders identify market reversals. With Pivot Points, traders can predict the support and resistance levels of a currency pair to make entry and exit decisions.
-
Keltner Channel
Keltner Channel is a technical indicator that provides traders with strong continuation signals and trend directions by assessing a currency pair's price volatility.
-
Leading vs Lagging Indicators
Leading and lagging indicators help traders measure the future and current performance of a currency pair, respectively. These indicators can help make successful trading decisions.
-
What is Relative Strength Index?
Relative Strength Index (RSI) helps traders understand how frequently the currency pair prices change in the forex market to predict the future market prices.
-
Wide Ranging Bars
Wide Ranging Bars are strong momentum indicators that help traders understand the market direction and identify ideal entry and exit points.
-
Harmonic Price Patterns in Forex
Harmonic Price Patterns allow traders to predict future price movements and trend reversals to make ideal entry and exit decisions in the Forex market.
-
Double tops and bottoms
Double Tops and Double Bottoms chart patterns help traders identify solid bullish and bearish trend reversals in the Forex market, and in turn, find the ideal market entry and exit points.
-
Falling and Rising Wedges
When you are trading currency pairs in the Forex market, it is essential to know when the market can possibly reverse. The Falling and Rising Wedges pattern help identify market reversal signals and accurate market entry and exit points.
-
Forex Scalping Strategy
Scalping refers to trading currency pairs in the Forex market based on real-time analysis. With Forex scalping, you hold a position for a very short period and close once you see a profit opportunity.
-
Symmetrical Triangle Pattern
Symmetrical Triangle Patterns help identify market breakdowns (price fall) and breakouts (price rise), and in turn, help you plot the entry and exit prices for profitable Forex trading.
-
Introduction to Technical Analysis in Forex
Technical analysis in Forex trading provides you with significant market trends, reversals and fluctuations and in turn helps you long and short term trades.
-
Trading breakouts and fakeouts
Breakout and fakeout trading enable traders to take positions in rising and falling markets.
-
Fundamental Analysis in Forex Trading Explained
Fundamental analysis in Forex trading is one of the several methods you can use to determine the relative security and intrinsic value of a nation’s currency.
-
8 Top Commodity Trading Strategies
Commodity trading is one of the best ways to diversify your portfolio and protect yourself from losses incurred due to inflation.
-
What is a Doji Candlestick?
The Doji Candlestick is a pattern used in technical analyses of trend reversals in a market.
-
Moving Average: The Complete Guide
Moving Average is used in Forex trading to compare the current currency pair pricing and where it stands with respect to the current average pair prices.
-
What is Volatility Index (VIX) and How Do You Trade It?
One of the most popular trading markets in the world, the foreign exchange market allows investors to make quick money by trading currencies.
-
Forex Profit Calculator
On average, a Forex trader can make anywhere between 5 to 15% of the initial amount they invested in the market.
-
Understanding markets gaps and slippage
The foreign exchange rate reveals valuable details about particular currencies a trader wishes to trade-in.
-
What is a pip in forex?
When trading in the Forex market, you need to have a close eye on two currencies at the same time. PIP helps you denote the change in a currency pair’s value.
-
Introduction to Order Types in Forex
Forex has different order types which allow traders to automate entering and exiting positions.
-
Using orders to manage risk
Forex risk management includes a robust set of rules and regulations that protect you against Forex's negative impacts.
-
Managing risk in 7 steps
Risk management in Forex is essential to individuals, groups of individuals, and organizations since it enables them to implement measures that help mitigate Forex risk and its negative impact.
-
Bullish and Bearish Flag Patterns
Blueberry Markets discusses why it is essential to study the bullish and bearish flag patterns in Forex. Learn more.
Advanced
Master risk management and
become an expert forex trader.
Move on to the advanced course.
Guide to Forex
Trading indicators.
Enter your details to get a copy of our
free eBook
Start a risk free
demo account
News & Analysis
Catch up on what you might
have missed in the market.