Forex Learning : Steve Nison is a person who popularized candlestick charts in America. One of the candlestick patterns introduced is bottom tweezer and top top tweezer. Tweezer can be seen in different forms, but all have the same properties. This pattern sometimes appears at the turning point of price movements.
In trading, candlestick charts can be used for analytical purposes which can indicate that there is a potential reversal or can be used in the broader context of market analysis to provide trading signals for subsequent trend movements.
Japanese have used candlestick charts for commodity trading since the 17th century because they can see visually to monitor price movements.
Tweezer is formed with a body candlestick which can be seen from the difference between the opening and closing prices. If there is a “shadow” on tweezer on both ends of the candle will be marked with high and low prices in that period. A black or red candle means that the closing price closes downwards, while a white or green candle indicates the closing price is closed upwards and higher than the opening.
Tweezer is usually located above and below, has patterns that indicate a trend reversal even though the wider context usually requires an additional candle to confirm the signal.
The tweezer pattern above often occurs when there are two highest candles that are almost exactly at the same level. The tweezer pattern below occurs when there are two lowest candles that occur at almost the same level after the decline.
Other additional criteria, usually the first candle has a large body (seen from the difference in opening and closing prices) but the second candle can be almost the same size.
For example, in a Tweezer pattern above, the first candlestick is probably a very strong candle, with a high closing price, while the second candle may be a doji (cross-shaped).
The tweezer top pattern or tweezer bottom pattern shows that the first candle is in a strong movement, while the second candle is the opposite candle which reverses the previous movement where there has been a momentum shift in the short term, and traders must know it.
Bearish Tweezer Top
A bearish Tweezer Top occurs when a bullish movement has formed a higher candle, and the closing price is close to the highest price (bullish sign). But on the second candle, a candle with a reversal pattern.
Bullish Tweezer Bottom
Conversely, a bullish tweezer bottom occurs during a downtrend when the market moves bearish and the price continues to move lower, and usually the candle closes near the lowest price (bearish sign). But on the second candle, a candle with a reversal pattern.
Important to note
- The candle usually forms a body with the same height or low (this is very important).
- This formation is a further decline or continuation of price movements.
- The tweezer tops formation tends to form with two or more candles.
- A better additional formation is a doji or hammer that makes a second peak that will add a signal that confirms that there is a shift in market movements.
Tweezer is a formation used by forex traders or investors to find out price action price movements that tend to follow a technical pattern of previous movements. This will make that the support and resistance areas will continue to be tested and continued to be tested. Strict discipline and risk management rules will help this setup increase a trader ‘s ability to transact.
Apply this candlestick pattern to the demo account .