Reading candles
Tweezer tops and bottoms
Two adjacent candles that reach the same high (top) or the same low (bottom), with opposite colors.
Tested more than once and no dependable profit survived costs.
Tests on stocks, index futures and EURUSD mostly find no reliable profit once costs are counted; the few positive results are in stock markets and depend on the exit rule. A pattern describes what price just did. It is not a forecast.
What it is
A tweezer top follows a rising candle with a falling one that stops at the same high. A tweezer bottom mirrors it. How close counts as the same is a choice; a fraction of the average range is a common tolerance.
What it suggests
The same price was rejected twice in a row, which is a small version of a level.
How to check it
Decide the tolerance in advance and note whether it formed at a larger level.
Common mistakes
- Widening the tolerance until every pair of candles qualifies.
How we will test it
On public price history, never on anyone's account. Until it is done, the note above is all we can honestly say.
- Cases: a tweezer top or bottom at a swing level
- Measure: share of cases where price closes beyond the pattern's far side first
- Window: next 5 candles
- Compared with: random bars with similar range
Sources
- Marshall, Young and Rose (2006), Candlestick technical trading strategies: can they create value for investors? Journal of Banking & Finance 30(8) (citation and headline finding only)
- Duvinage, Mazza and Petitjean (2013), The intra-day performance of market timing strategies and trading systems based on Japanese candlesticks, Quantitative Finance 13(7) (abstract or primary page read)
- Fock, Klein and Zwergel (2005), Performance of candlestick analysis on intraday futures data, Journal of Derivatives 13(1) (citation and headline finding only)
- Orquin-Serrano (2020), Predictive power of adaptive candlestick patterns in forex market: EURUSD case, Mathematics 8(5) (abstract or primary page read)
- Lu, Chen and Hsu (2015), Trend definition or holding strategy: what determines the profitability of candlestick charting? Journal of Banking & Finance 61 (citation and headline finding only)
Related lessons
Written in our own words. Education only, not financial advice.