Tweezer tops and tweezer bottoms are candlestick patterns.
While technical indicators make trading easier for many people, they certainly have their limitations.
One of them is lagginess. That is, while there are more responsive technical indicators, they always lag behind price action to some extent.
Because trading is so competitive, its only reasonable to want to avoid delays as much as possible and see early if the market trend is shifting.
That’s where tweezers can help.
As candlestick patterns, they give you a real-time reading of the market.
With tweezers, you longer have to wait for an indicator to tell you if there is something unfolding. You will know it.
There is only one problem.
If you’re anything like most traders, you likely don’t know much about what tweezer tops and tweezer bottoms are, let alone how to trade them.
Dont worry, well solve that in this article and explain all you need to know about these patterns.
Well also provide you with lots of examples to look at, so you can examine different setups and practice spotting tweezers.
Tweezers are two candlesticks with matching highs or lows.
They are referred to as tweezer tops and tweezer bottoms because they resemble the two prongs of a pair of tweezers.
Ideally the tweezers should have a candle with a long body first, with a smaller-bodied candle thereafter.
You can see this in the picture above.
The idea is that whatever strong effect the market had on the first candle is dissipating with the subsequent small candle, implying that a reversal could be on the way.
Of course, you shouldn’t rush to short uptrends and buy dips every time there is a tweezer top or bottom.
Simple principles can be powerful in forex, but they must be used in the right context, and tweezers are no exception.
(It also helps if you have a trading plan with risk management and all that other great stuff, but were not going to delve into that here; there are plenty of guides on the blog that cover these topics.)
In the next two sections, we will take a closer look at tweezer tops and tweezer bottoms one at a time.
Then we’ll discuss how to place them in the right context, filter out bad signals, and open high-probability trades.
The tweezer bottom indicates that the market may have hit a level of support from which it can begin to rise.
That said, touching a low point two times in a row is not enough of a clue by itself to jump on a trade against the trend.
So, if you want to trade tweezer bottoms successfully, you need to be able to filter out signals that show it is worth it to trade.
You also need to be clear with your expectations.
Chart patterns like the double bottom , where daily or even yearly trends turn around.
This is because these patterns consist of many candlesticks and take a long time to form, leaving a discernible pattern of shift in market sentiment.
Candlestick patterns, on the other hand, are not particularly complicated. The tweezer bottom may be a solid trading pattern, but it is merely two candlesticks on the chart with the same low.
You cant really compare a signal like that to a pattern with hundreds of candles that has been developing for weeks.
Even if there is a strong tweezer bottom (which we will show you how to spot in a moment), it is probably best to take it as a signal for a trend retracement rather than for a complete reversal.
The tweezer top indicates that the market may have hit a level of resistance from which it can begin to rise.
The situation is very similar to the tweezer bottom we mentioned above, and everything we said applies here as well.
You must be careful expecting large trend reversals with tweezer tops since most will only be followed by a moderate consolidation.
In uptrends, buyers will usually look out for these dips and jump on them to add to their positions. So, if you started selling into every tweezer top you saw in an uptrend, you could easily burn yourself.
Okay, so now you know that tweezers are no silver bullet.
But guess what?
There are a few simple things that can make tweezer tops and bottoms much more reliable trading signals.
That’s what we’re going to talk about now.
The first thing is to differentiate between tweezers that form on daily, weekly, and monthly charts, and tweezers that are intraday.
Tweezers on long-term charts are the most important because they mark powerful price levels that often become the base for a sustained rally or drop.
Let’s take the weekly chart as an example.
If two weekly sessions (two candlesticks on the weekly chart) have the same low, it indicates that the market has been fighting to break through that level for quite a long time.
Although there are just two candlesticks on the weekly chart, if you zoom in, there are 10 daily candles, 60 4-hour candles, 1-hour candles, and so on.
Many of these candles linger around the same level and the market has most likely led an attack or two on the extreme price during the two-week period, making it a potent support/resistance level.
With intraday tweezers, the situation is different.
Two 1-hour candles touching the same high/low can easily be a random coincidence rather than the sign of a significant shift in market dynamics.
We’re not saying that all high-timeframe tweezers are winners and all low-timeframe tweezers are whack signals. Far from that.
But, in general, for intraday tweezers it takes a special combination of candlesticks to become important while long-term tweezers have the privilege of being around longer and thus having a higher chance to better reflect the market sentiment.
If you want to trade intraday tweezer tops and bottoms, look out for patterns where the second candle is a reversal candlestick.
In the following section, we’re going to take a look at two different trade set-ups where you will see examples of what that looks like in action.
There are many ways to trade tweezers, but you probably want to trade them in a way that provides you the highest chance of winning.
In this scenario, you will undoubtedly benefit from seeing the examples below, which will walk you through two high-probability trades, detailing all the key steps from planning to implementation.
First, we’re going to look at a tweezer bottom, so let’s consider the following tweezer bottom set-up:
We took this screenshot from the daily AUD/JPY chart.
There are two reasons we are interested in trading this pattern. First, you can see that the market has been going down for 10 candles in a row.
That means 10 consecutive days where prices have fallen.
When the market is so overextended in one direction, a correction or some movement in the opposite direction is almost certain to come.
This is because shorts (people that sold the currency pair) can close their positions and realize their gains by buying back.
When you combine this with the potential that some people have positive views and will want to take advantage of the cheaper price, you can understand why a rebound is likely.
Even if it is only temporary, we can trade this movement and profit.
The second reason is that you can clearly see how sellers are already losing momentum.
The first few candles were large bearish candles, but then we saw smaller and smaller candles, which eventually began converging around the same area, indicating a likely market bottom.
The tweezer bottom is the hallmark of this and it is our catalyst to enter into a long trade.
So, at this point, we can zoom in on the chart a little more. Lets take a look at the minute chart and try to come up with a trade idea that will allow us to join this trade with a tight stop loss.
This will help us to magnify the return we can get out of trading the rebound.
Below you can see a possible set-up:
We plan to enter when the price reaches the nearest resistance level and breaks out of it. This resistance, by the way, is around the high of the second candle in the tweezer bottom.
So, if our entry criteria is fulfilled we open a long trade.
You can see that the stop loss is really close. The take profit, however, is far. So far, in fact, that it is not even included on this screenshot simply because it would not fit into the picture.
The TP is positioned far because it is set on the daily chart, whilst the SL is set on the minute chart.
Setting your stop loss on a lower timeframe and your profit objective on a higher timeframe is a common strategy that will help you maintain good risk-reward trades.
So, there you go.
This is an example of what a great trade looks like using the tweezer bottom. And of course, you can reverse this explanation for the tweezer top.
It is also not necessary that you incorporate into your system. You can simply look for tweezers and set your stop loss and take profit on the same timeframe.
Heres an example, this time with a tweezer top:
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Note that the second candle in the formation is a top reversal candlestick.
It is a , which forms when the upside momentum slows down.
When the tweezer top has a hanging man as its second candlestick, you have a strengthened signal: two matching tops and another reversal pattern.
If the next candle closes under the hanging man body, odds are strong that a top has been reached.
That’s why we placed our entry at the close of the very next candlestick after the hanging man.
So, if you want to trade the best tweezer top, look out for a pattern like this where the second candle of the pattern is a hanging man and the third candle closes below the hanging man’s body.
We set the stop loss above the tweezer because if the market reaches this point, then the trade idea is wrong and we want to take the loss and move on.
As for the take profit, we simply calculated which price would earn us twice the risked amount and set it at this level.
Tweezers are two candlesticks with matching highs or lows. They are referred to as tweezer tops and tweezer bottoms because they resemble the two prongs of a pair of tweezers.
The tweezer bottom indicates that the market may have hit a level of support from which it can begin to rise.
The tweezer top indicates that the market may have hit a level of resistance from which it can begin to rise.
A possible strategy is to look for tweezers on daily or weekly charts. You can zoom in on the chart and enter using a low timeframe. Set your SL on the low timeframe and your TP on the high timeframe.
In this guide we discussed what tweezer tops and tweezer bottoms are in forex.
You not only learned how to spot these candlestick patterns, but we also went over two trading possibilities employing tweezers.
The key to remember is that tweezers are most reliable on daily and weekly charts. For intraday tweezers, look out for patterns where the second candle is a reversal candlestick.
At the end of the day, whether or not you utilize tweezers in your trading is entirely up to you.
Feel free to look around our blog, learn about various topics, and develop a trading plan that works for you.
Technical analysis, or TA for short, is a trader’s best friend when it comes to finding the best opportunities for trading in the volatile forex market, but the subject matter is vast. Where do you start on your TA journey as a beginner? Indicators and pattern recognition are two key areas worthy of early study, including a foray into the realm of Candlestick patterns. One of the many interesting trading techniques showcased in this arena is known as the Tweezer Top pattern.
Japanese traders have used candlesticks in commodity trading since the s, but it took another years before these techniques were explained to a Western audience. The Tweezer Top forex pattern is just one example that has been studied and utilised by veteran traders over the last 30 years. In this article, you will learn about candlesticks, the Tweezer Top pattern, what it means when you see it and how to incorporate it into your daily trading regimen.
Candlesticks are now common on our charts. They are a clever way to present open, close, high and low-price points for a specific trading timeframe. The ‘body’ is typically a box enclosing the opening and closing values, while ‘wicks’ or ‘shadows’ extend from either side of the body to reflect the high and low value for the period. These charts use the colour convention of showing a gain as a green body and a fall in prices as a red body. The various shapes for a given period or series of periods proffer a measure of investor sentiment.
The definitive sourcebook for studying candlestick patterns is Japanese Candlestick Charting Techniques, authored by Steve Nison and published in Traders adept in the art of interpreting candlestick signals can often spot highly probable reversals or trading setups where trend continuations are highly likely. As with all technical indicators, however, these formations are not perfect, but they do offer a way to get the needed edge in a market to be successful.
What is the forex Tweezer Top candlestick formation? Courtesy of eToro, review this chart:
Source: MetaTrader
A daily EUR/USD chart with annotations is presented. To begin with, the use of the word ‘Top’ is a bit of a misnomer. Tweezers can be both a Top and a Bottom, and, as with tweezers having two blades, a Candlestick Tweezer also appears as a pair of candlesticks side by side. A ‘Top’ refers to the occurrence of two candles with two high points of roughly the same value. For a ‘Bottom’, the opposite is true, signifying a possible bottom reversal, as opposed to a top reversal.
After a bit of study, you will discover that candlesticks come in a variety of shapes. One or both of the candles in a Top or Bottom Tweezer can also be one of these shapes, which will provide additional information on the trend at hand, whether it might be a continuation or an imminent reversal. Another benefit is that the Tweezer wicks give you an optimum positioning for a stop-loss order, since their presence quickly becomes a support or resistance level.
The following graphic presents a basic understanding of several common and popular candlestick patterns. Note that signals originate from either a single or series of successive patterns and have stylish names, while the green/red arrows denote the trend changes that followed each grouping:
A trader need not be aware of every candlestick shape in existence, but an understanding of the basic patterns can be extremely helpful when trying to interpret the meaning behind a Tweezer formation. These technical signals are a guide for developing a trading strategy, but combining additional indicators to complement and confirm the suggestions observed can always enhance the effectiveness of these little shapes.
There is a basic logic behind why the Tweezer pattern is a good indication of an imminent change in pricing direction, but not all Tweezers are the same. The lengths of the two wicks/shadows are important, as are the directional colours of the two opposing candlesticks. Ideally, the wicks will be rather longish by nature, a sign of strength, and the body of the second candlestick will represent a strong reversal in immediate pricing behaviour.
In our overview example above, the initial Bottom pattern has rather short down wicks. A reflection of the weakness of this signal is that the succeeding candle actually has a lower low than the preceding Tweezer. The Top pattern that follows, on the other hand, displays slightly larger wicks, along with a demonstrably larger down body, per the red candle in the chart. In this case, the signal is highly representative of a good trading setup, and we will revisit this example in the trading discussion that follows.
From an investor sentiment perspective, the Tweezer pattern is telegraphing a distinct change in investor support in the case of a Top, and the opposite is true when a Tweezer Bottom is encountered. In other words, momentum is ebbing. This shift could be the sign that a strong trend is ending, or it could also highlight a brief period of profit taking and the further continuation of the trend at hand. Please be aware that trading is risky and can result in significant losses.
Interpretation of the Tweezer pattern can also be enhanced when the shapes take on the dimensions of other common candlestick patterns. The Top in our overview example is a good illustration of this premise. The second red candle is also known as a ‘Bearish Engulfing Pattern’. Its body fully engulfs the preceding green body, thereby signifying a pullback before a sharper downward trend. It usually makes an appearance at the end of an upward trend, but its reliability is hampered in ranging markets. Combined with a Tweezer, it is more effective.
In some cases, the literature on Tweezer formations actually describes a more limited explanation for this particular shape. A few authors only speak to a Tweezer Top or Bottom as those situations where two or more candles have matching tops or bottoms without wicks or shadows. As noted above, the absence of wicks would suggest a very weak reversal or continuation signal, which could be enhanced greatly
if one of the candles resembled another important shape. For example, an ‘engulfing’ pattern, when it is the last in the series, would strengthen the signal considerably.
Tweezer patterns appear in financial markets, including the forex market, quite often. It is common for investors to have a second thought about future pricing directions, but with the assistance of other candlestick shapes and technical indicators, the voracity of Tweezer signals can be greatly enhanced. No technical system of alerts will ever be correct for every situation, but with further confirmation from other sources, a trader can get the edge he needs to succeed.
Tweezer Tops forex patterns offer excellent setup opportunities, especially when an additional technical indicator is used for confirmation of the validity and quality of the signal observed. Let’s delve a bit deeper into our overview chart to gain Tweezer trading insights for future use.
Source: MetaTrader
We have broadened the overview chart to include more time periods, and our focus will now be on the Tweezer Top formation occurring in the middle of the EUR/USD daily chart, courtesy of eToro. The two upper wicks for the candles forming the Tweezer are similar in size, although not exactly the same. The first body is green, followed by an opposing red one, which is also an ‘engulfing’ pattern. The signal is for a pullback, a possible sign of profit taking, as investors have sold the euro short in the process and a portion of them wish to cash in their profits. Please be aware that trading is risky and can result in significant losses.
We have added the Stochastics indicator at the bottom of the chart, and it is sending a similar signal of waning momentum. It had risen from its oversold territory, but the two lines refused to cross past the middle range of the scale, a sure sign of weakness in the price move. Odds favour a continuation of the previous downward trend. Sell the euro short with a stop-loss order inserted at the top of the two opposing wicks of the Tweezer.
Do you see the ‘hammer’ on the right of the chart in the green circle above the Stochastic indicator? It is another reversal signal, courtesy of Japanese Candlestick trading techniques, and, when combined with the Stochastic reversal, it represents a good time to close our position. In this case, this trade would have yielded a gain of roughly pips, but keep in mind that the Tweezer is capable of giving false signals as well.
Tweezer Top and Bottom pattern recognition can be a formidable addition to any trader’s technical toolbox, along with a healthy understanding of complementary candlestick formations. The strong point of this pattern is its ability to forecast a pullback in market action. In order to gauge the strength of the pullback and whether it might be a reversal or a continuation of an existing trend, it is important to combine its guidance with that of another indicator system.
Practice time on a free demo system is an excellent way to get familiar with the various aspects of the Tweezer and to gain confidence in its use. Learn to insert stop-loss orders as the Tweezer suggests and try out a few other indicators to act as signal confirmation tools. Using the Tweezer in real-time will soon demonstrate its benefits and incorporating it into your daily trading regimen will be easy and straightforward.
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The Naked Forex Tweezer Pro Indicator for MT4 is currently available at Trading kernel. the standard Tweezer is a two-bar pattern. This enhanced version is a multi-bar pattern. It filters the patterns for you so that you only get the best and most effective patterns and ignore the noise.
The indicator does what it was designed for: displaying Tweezer patterns. Don’t expect to follow the up and down arrows and make money. Trading is not that simple. The Tweezer pattern is a starting point. The arrow is not a confirmed BUY and SELL signal in itself. The Tweezer indicator alerts you that the market might be at a turning point now. Then you must use other elements of your strategy (trend, momentum, support/resistance, volatility, daily bias, and other indicators) to confirm the signal and place a trade.
Naked Forex Tweezer Pro system can give you trading signals you can take as they are or add your additional chart analysis to filter the signals further, which is recommended. While traders of all experience levels can use this system, it can be beneficial to practice trading on an MT4 demo account until you become consistent and confident enough to go live.
You can set the Naked Forex Tweezer Pro Indicator to send you a signal alert via email, Mobile Notification, or platform pop-ups. This is helpful as it means you do not need to stare at the charts all day waiting for signals to appear, and you can monitor multiple charts all at once.
Naked Forex Tweezer Pro IndicatorSystem can be used on any Forex currency pair and other assets such as stocks, commodities, cryptos, precious metals, oil, gas, etc. You can also use it on any time frame that suits you best,from the 1 minute through to the 1-month charts.
The Tweezer Pro version lets users define their own pattern definition. It’s meant for expert traders who want to use their own optimized settings.
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The Tweezer Top and Bottom, or just Tweezers, are two well-known patterns. We will examine both in this post and provide essential tips for using them in your trading approach. Even though they are not always so easy to spot, we will give you a great overview of how to spot and include them in your trading arsenal. Also, a great trader needs a broad portfolio, so we’ll give you three alternative trading approaches specifically suited to markets like Stocks, Cryptocurrencies, Commodities, Forex, and even NFTs.
In general successful trading with candle charts requires an understanding not only of the candle patterns but also of where the candle pattern appears and in the context of risk/reward analysis. Before placing a trade based on a candle pattern, one should always consider the risk/reward aspect.
The Tweezer Top Pattern is formed when two or more successive candlestick highs match. The pattern resembles the two prongs of a tweezer, hence the name. The Tweezer Top can be composed of real bodies, shadows, or doji, and is most effective when the first candlestick is long with a small real body for the second candle. This pattern signals a shift in market momentum and a potential trend reversal as bears begin to take control of the bulls.
The graphic above shows the perfect pattern. However, the pattern can vary a bit; sometimes, the shadows might not align perfectly, or the real bodies might not align, but the shadows align. So, keep in mind that a slight leeway is possible with the tweezer pattern. Thus, waiting for confirmation from other technical indicators is essential to maximize the pattern’s effectiveness.
The Tweezer Bottom Pattern is characterized by two or more successive candlestick lows matching. A perfect Tweezer Bottom Pattern involves a long first candle with a small real body for the second candlestick. This pattern indicates a potential reversal in the prevailing trend, with the bulls gaining strength over the bears.
However, a Tweezer Bottom Pattern should not be used in isolation, and investors should also look for a bullish candlestick signal to confirm the pattern.
The following three strategies are universal and can be applied to any asset class.
For the first strategy, we use the RSI to identify overbought patterns and Tweezer Top Patterns. The RSI measures the strength and momentum of an asset’s price action, with a reading above 70 indicating that the asset is overbought and a reading below 30 suggesting it’s oversold.
In this case, we trade Microstrategy (MSTR) to demonstrate a live scenario in the charts. It’s worth noting that the stock is highly correlated with Bitcoin since the company holds a significant amount of Bitcoin on its balance sheet.
In this particular case, the pattern is clearly visible and confirmed by the RSI indicator. There’s an overall uptrend, and a new top is formed on November 8, , with a long green candle. The following day, we see a reversal with the same top and a small red real-body candle, indicating a potential Tweezer Top.
The RSI confirms that the asset is overbought, with a value of around Waiting for the next candle on the daily chart can provide confirmation of the trend pattern. A good entry position for a short trade might be around the mark, which could continue until around the mark, where the RSI turns in the opposite direction with a value below
Trading Rules:
The second strategy involves using the ZigZag and Supertrend indicators to identify potential trend reversals. Here we are showing a possible scenario on the natural gas chart.
The ZigZag indicator helps to filter out market noise and identify significant price movements. It connects swing highs and lows in a zig-zag pattern, highlighting price reversals and trends.
The SuperTrend identifies the current trend and potential entry and exit points. It uses the average true range and a moving average to calculate a band above or below the price, which can help you determine the direction of the trend. If the band is green and below the price, it indicates a buying opportunity; if it is brown/red and above the price, it is a selling signal.
As you can see from the charts, a downward trend has been ongoing for months. You can see the downward trend from the beginning of the chart. On February 21st, a Tweezer Bottom is starting to form. Here, the pattern is imperfect; the first candle is not very long, and the next green candle does not align perfectly. However, in combination with the other indicators, it shows to be more reliable and a good opportunity for a long trade.
The first indicator showing promise is the ZigZag indicator, which turned long. It does not give us any indication if the trend will continue to be long, just that a new low has been formed and that we might take a long trade. If we solely relied on the ZigZag and the pattern, we might have taken a profitable trade that moved from the 2$ mark to the 3$ mark within two weeks.
On a side note, a Tweezer Bottom pattern formed before in the downtrend, such as around January 5th or the 10th. However, the lack of a reversal in the ZigZag indicator precluded any trades at the time.
Also, as the ZigZag indicator tends to lag slightly behind and is not a long-term trend indicator, it is essential to rely on a second trend indicator like the Supertrend. The Supertrend indicator remained on the downtrend with the previous week’s Tweezer Bottom Pattern but changed with the show of our Tweezer Bottom Pattern on the 21st.
If you had taken that long trade and waited for every confirmation, in the worst-case scenario, you would have profited from around $ to $. However, the possibility was there to make a greater profit, especially if you had protected yourself with a stop loss at the level, just below the last top indicated by the ZigZag.
Trading Rules:
The third strategy utilizes three indicators – the EMA Cross, the Trend Strength Index, and the Ultimate Oscillator. The strategy shows how to spot a false tweezer bottom. We provide you an example where the Tweezer Bottom Pattern showed, but the indicators did not match, thus showing when not to take a trade. Here, we were trading the British Pound/USD pair; however, you could apply this strategy to almost every asset.
The EMA Cross uses two exponential moving averages (EMAs) with different time periods (9 days & 26 days) and plots them on a chart. When the shorter EMA crosses above the longer EMA, it suggests a bullish trend, while a cross below indicates a bearish trend.
The Trend Strength Index (TSI) uses the difference between two smoothed moving averages of the price to calculate momentum, with a positive value indicating a bullish trend and a negative value indicating a bearish trend. It has a neutral value at 0, with a downtrend going below and an uptrend going above.
The Ultimate Oscillator (UO) combines three different time periods of moving averages and uses them to calculate buying and selling pressure. A low level is around 30, and a high level around
Let’s start with an explanation of why it would not be advisable to take the trade. On March 07, the Tweezer Bottom pattern shows, but the other indicators do not confirm the entry. Here, the market has been trading sideways for a while and is coming from a previous uptrend. This does not really support the needed downtrend for the Tweezer Bottom pattern.
Moreover, the EMA Cross did not confirm the outbreak in the shorter timeframe as the orange line did not cross the green one. Also, the Ultimate Oscillator and the Trend Strength Index do not show a true bottom, as they remain rather neutral compared to the previous swings. Even though the UO might indicate some type of bottom, the TSI has a value of 0 at that point, showing no bullish indication. As a result, we would not recommend taking this trade as we do not see any indications of a favorable risk/reward ratio.
Trading Rules:
When trading candlestick patterns, having the right platform is crucial to success. Here are some key factors to consider when choosing the best platform:
If you’re looking for a platform that offers all of these features, Morpher is a great choice. It’s specifically designed to provide the best trading experience possible, with maximum flexibility, a wide range of assets to trade, great indicators and an advanced chart view, infinite liquidity, and zero fees.
In conclusion, these patterns have proven to be valuable tools for making profitable trades. By incorporating the Tweezer Top and Bottom patterns into your trading strategy and using technical indicators to identify market trends, you can maximize your chances of making informed trading decisions.
Disclaimer: All investments involve risk, and the past performance of a security, industry, sector, market, financial product, trading strategy, or individual’s trading does not guarantee future results or returns. Investors are fully responsible for any investment decisions they make. Such decisions should be based solely on an evaluation of their financial circumstances, investment objectives, risk tolerance, and liquidity needs. This post does not constitute investment advice.Trading rules:
The Tweezer indicator can be used with any time frame.
The Tweezer indicator can be used with any class of assets: Forex, Stocks, Indices, Futures, Commodities and Cryptos.
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