How to Trade on Tweezer Top and Tweezer Bottom Candlestick Patterns

They can appear at the top of an uptrend or the bottom of a downtrend and indicate that the trend is starting to lose steam. The price hits a level, bounces off, and refuses to break through. They don’t mean a reversal is definitely coming, but they’re a strong sign that the price is starting to hesitate. Traders can use other data tools to confirm a reversal.

The difference between Tweezer Tops and Tweezer Bottoms

There are two types of Tweezer candlestick patterns, depending on bullish and bearish momentum. Both are rejection patterns, meaning that the price hits a level, bounces off, and refuses to break through.

A Tweezer Top shows up after an uptrend and suggests the price might fall. The first candle will usually be green (bullish), showing buyers are still in control. Then the second candle opens at the same high as the first one and closes lower. Most of the time, this one is red (bearish).

When a Tweezer Top is formed, it means that buyers tried to push the price higher again but hit the same resistance as before. They couldn’t break through, and sellers shoved back harder, pushing the price down. The formation suggests that the uptrend might be coming to an end, and if the next candle is also red, that's a stronger warning that the uptrend might be over.

A Tweezer Bottom works in the opposite way. It appears after a downtrend and hints that the price is hitting a support level and will possibly bounce back up. The first candle is therefore red. The second candle opens at the exact same low as the first one, but is unable to break through lower, and finishes green.

Tweezer Bottoms tell you that the selling pressure is coming to an end. Buyers then take the lead and outnumber sellers, driving the price up. If the next candle is bullish and breaks above the Tweezer range, it’s a pretty good sign that a bullish momentum is starting to take hold.

How to spot a Tweezer candlestick pattern

Spotting a Tweezer pattern is very simple. You don’t need to dig into indicators or draw lines or anything like that. You just look at your chart and find two consecutive candles. In a Tweezer Top, they’ll both have the same high. In a Tweezer Bottom, they’ll share the same low. The first candle should be going with the current trend, and therefore be green if the trend is bullish, and red if the trend is bearish. The second candle should show that there is a rejection.

Candlestick charts can be set for different timeframes. On very short timeframes like 1-minute charts, the market moves around a lot due to random activity. This creates a lot of small patterns that don’t really mean anything. A term that traders often use to call this is “noise.” A trend is more likely to be spotted by taking a step back and seeing the bigger picture. Tweezer patterns tend to work better on longer timeframes, such as 4-hour charts, daily charts, and so on, because they’re more likely to reflect what real buyers and sellers are doing and could signal a bigger move.

Just because two candles line up at the same high or low doesn’t automatically make it a strong Tweezer, though. The second candle should show some kind of reaction to the first, such as the price reversing or struggling to break through. It has to be a strong signal that control is switching from buyers to sellers or from sellers to buyers.

A Tweezer pattern also doesn’t mean much on its own. It has to show up at a certain time, either during an uptrend or a downtrend, at a clear resistance or support level. If you see it form in the middle of a sideways range where the price is just chopping around, you should most likely ignore it.

Entry strategies for Tweezer candlestick patterns

Trading Tweezer patterns is relatively simple, but the more indicators you use to back up your assertion, the greater the probability you have of placing a successful trade.

First, identify a clear trend upwards or downwards, and disregard tweezers that form when the market is just moving sideways.

After you see a Tweezer Top or Bottom forming during a trend, don’t jump in right away. Wait for the next candle to form — that will be your confirmation. For a Tweezer Top, the confirmation will look like a candle that drops below the pattern. For a Tweezer Bottom, the candle would push above it.

Once that confirmation candle appears, you have your signal to enter the trade. You then have two options, depending on whether it’s a Tweezer Top or Bottom.

If it’s a Tweezer Top and you think the reversal is coming, you can enter a short position in the hopes of making money as the price drops, and place a stop-loss just above the pattern's high in case the price breaks through. For a Tweezer Bottom, you can buy in, hoping to make money on the way back up by selling it for more than you bought it for. You can set a stop-loss just below the low in case the price breaks lower.

To close your position and take profit, you can set a limit at a recent support or resistance level or sell it whenever you feel comfortable. Using tools like the RSI and the order book can help you identify clear and logical price targets to close your position.

Common mistakes to avoid

A common mistake traders make when trading Tweezers is selling or buying too early, as soon as they see the Tweezers form. Waiting for the confirmation candle increases your chances of trading logical signals rather than noise, making it less of a guessing game. Take your time, prices tend to react more around important support and resistance levels, so a Tweezer pattern that forms around those levels after a long rally will more likely be followed by a reversal than one that forms in the middle of nowhere.

Unless there are really solid reasons to do so, trading on a Tweezer pattern against the trend is generally a mistake. If the overall trend is strong, then a small reversal pattern might not hold, and the market can just keep going in the same direction after a little pause.

Trading without a stop-loss can also lead to bigger losses. Nothing is certain when it comes to trading, so even if the Tweezer pattern setup looks perfect and you find confirmation from other indicators, things can go wrong. Using a stop-loss can therefore protect your account in the event that things don’t turn out as expected by automatically pulling you out of the trade after a certain level to avoid further losses.

It’s also OK to just walk away from a trade, even if you’ve spent time on it. Sometimes a trader will want to open a position because they will feel like they wasted their time planning for the trade if they don’t. This can be a mistake when they haven’t had enough confirmation, or when they were correct, but took too long to enter the trade. Timing is important, so it’s better to abort and miss a trade altogether than to rush in too late after the opportunity has passed, or get caught in a fake-out and watch your balance plummet. The goal isn’t to trade every signal, but to trade the right ones at the right time.

Tweezer pattern example

Let’s look at an example. You are watching candles on the 4-hour AUDUSD chart. The price has been rallying. Suddenly, two candles pop up with the exact same high. The first one is bullish. The second opens at the same high, then turns bearish and closes lower.

Your Tweezer pattern has formed, so you now check for confirmation. The RSI is over 70, which means the pair is overbought. This is a good sign because it supports the case for a reversal.

The next candle opens and drops past the lows of both candles. This is your entry point for a short position. You set a stop-loss just in case, just above the highs of the last Tweezer candles. You can then set a limit to exit this short-term trade at the next support level.