Tweezers top and Tweezers bottom are the candlestick version of support and resistance. Tweezers,
in fact, are two or more candles with the same highs or same lows. In an uptrend, a tweezers top is formed
when two or more consecutive highs match. In a downtrend, a tweezers bottom is formed when two or more
consecutive lows match.
The logic of this pattern is that if we have two or more consecutive highs or lows,
it means that that price is hard to overcome.
That's why I introduced this pattern as a candlestick version of support and resistance, because it
reminds me the same logic of support and resistance.
Here we have euro-dollar on a 4-hour chart and I have zoomed in to have a better view of the
pattern.
As you can see euro-dollar is in an uptrend, then there are two candles that reach the same high.
Could it be that sellers are selling the currency pair at that price and buyers struggle to go over it?
In this chart instead we have pound-dollar on a 4-hour chart.
You can see that sellers are in control at the beginning but they can't break the level that is formed
by the two lows of the tweezers bottom.
Last thing, I want to give you a quick tip based on my experience of the forex market. The tweezers work
better when they also form another pattern.
For example, here we have a tweezers top that also form a bearish engulfing.
This one is a tweezers bottom with a second candle that is also a long legged doji.
In general when you have more clues that indicate the same trade to take, it is better.
That's why when the tweezers
also form another pattern you have a stronger signal.