Tweezer Top Patterns
Tweezer top patterns are a two candlestick reversal pattern with co-equal tops. This pattern can form at turning points in the market near support levels signaling a bearish reversal. Trend traders can find a tweezer top pattern to be really helpful because of what it means. Knowing when a trend is going to end and one begins is pretty helpful. Look for price to break below second candle to confirm bearish reversal.
Table of Contents
What Are Tweezer Top Patterns?
A tweezer top pattern consists of two candlesticks that form two peaks or resistance levels that are equal height. Typically when the second candle forms, it can’t break above the first candle and causes a tweezer top failure.
Tweezer top patterns are a two candlestick pattern. A tweezer top occurs after price has been moving up. Two candlesticks form highs that are almost if not the exact same.
So while perfect tweezer tops would have equal highs, it’s ok if one high is a tiny bit higher than the other.
In order for the two candles to be considered a tweezer top pattern, the first candlestick should to have a long real body. It doesn’t matter if they’re bearish candlesticks or marubuzo candlesticks.
The second candlestick can be any size. So the two candles can look a lot different from each other. You could see hammer candlesticks next to the first candlestick.
As long as the highs of those two days are same, it doesn’t matter what the candlesticks look like. The first candle should move in the direction of the trend. The second candle can pause or completely reverse the trend. This could be why doji candlesticks tend to form the second part of the pattern.
How to Trade Tweezer Top Patterns
- Watch for 1st top candlestick to form
- Next, watch for 2nd candlestick for form a co-equal top
- Then, watch for 3rd candlestick to fall below 2nd
- Traders take a short once price breaks below the 2nd candlestick
- Place stop at top of the 2nd candle
- Some traders take a long position once price breaks above 2nd candle
- Then place stop below the 2nd candle
When tweezer top patterns form, they tend to be in a bullish trend. Bullish stocks can be trading above those moving averages. Hence the reversal. They need to go back to equilibrium.
Final Thoughts
Tweezer top patterns happen quite frequently on charts. It depends on what conditions the tweezer tops form in as to whether or not they really don’t mean anything or they are trade worthy.
They can be continuation candles if they form in a pullback of a strong trend. This would allow you to get an entry.
When they form at the top of a trend, you know a reversal is coming.
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