Table of Content

How does the Tweezer Top Candlestick Pattern Work?

This article explains what the Tweezer Top candlestick pattern is and how to trade it.


Financial markets are full of volatility and uncertainty. When making trading decisions in these markets, we use a variety of tools and analysis methods. Among these, technical analysis is the most widespread and highly popular. At the heart of technical analysis is the analysis of Japanese candlestick patterns. Candlesticks reflect the balance of supply and demand in the market. By reading candlestick patterns, we try to predict trend changes, reversal points, and price movements in the market. One of the patterns we use in candlestick analysis is the "Tweezer Top" pattern.

Image depicting the Tweezer Top candlestick pattern in financial trading
Tweezer Top Candlestick Pattern

  • Topic: Tweezers Top
  • Type: bearish
  • Trend direction: reversal and correction
  • Opposite pattern: Tweezers Bottom

What is the Tweezer Top candlestick pattern?

Tweezer Top is a bearish reversal pattern indicating the beginning of a downward trend. This candlestick pattern usually appears at the top of an uptrend, indicating a slowdown or halt in the upward momentum. The Tweezer Top pattern can also signify the beginning of a correction or a trend reversal. The name "Tweezer Top" originates from the resemblance of the two candles used in the formation of the pattern to the tips of a pair of tweezers. This pattern reflects price indecision between buyers and sellers. The term "Top" refers to the pattern's typically occurring at the peak of an upward trend.

What is the structure of the Tweezer Top candlestick pattern?

The Tweezer Top is a Japanese candlestick pattern that is formed by two candlesticks coming together. The Tweezer Top formation can indicate a period of waning bullish strength and increasing bearish activity in the market. This can signal that the current trend is slowing down and that there is an increased likelihood of a correction or a trend reversal. The Tweezer Top pattern consists of two candles:

- First Candlestick: The first candlestick forms after an uptrend and appears as a long green (bullish) candlestick. It may have a long body.

- Second Candlestick: The second candlestick comes immediately after the first candlestick and opens and closes at the same level, or opens and closes with a small difference. The body of the second candle can be the same as or shorter than the body of the first candle.

The Tweezer Top pattern, consisting of two consecutive candlesticks, can indicate that buyers and sellers are indecisive about changing the price or that the price is balancing at a certain level. The shadows of both candles in the pattern are often very small.

How to trade with the Tweezer Top candlestick pattern?

When the Tweezer Top pattern forms, it creates a signal for a trend reversal or at least an expectation of a price correction. When the pattern forms at a resistance level, it can be considered a more reliable signal to enter a short position.

Selling: We can sell at the level where the second candlestick is fully formed and the pattern is confirmed.

Stop Loss: The stop-loss level is usually placed slightly above the level where the pattern is formed.

Target: The Tweezer Top pattern usually signals the start of a downtrend. Therefore, technical analysis tools such as support levels and Fibonacci retracement levels can be used to prognosticate how much the price will fall.

Here's an example of trading with the "Tweezer Top" pattern on the EUR/USD daily chart:

Tweezer Top candlestick pattern trading example on EUR/USD daily chart
Tweezer Top on EUR/USD chart

Allow me to highlight that: Risk is inevitable in the Forex market. When trading, the Tweezer Top pattern, like any candlestick pattern, can provide misleading signals. Therefore, it is not recommended to rely solely on this pattern. It should be validated in conjunction with other technical analysis tools and formations.

Post a Comment