Tweezer
Candlefocus EditorThe tweezer pattern was popularized by Steve Nison in his book, Japanese Candlestick Charting Techniques. His book outlines the rules for identifying tweezers, which involve two or more bars with the same highs or lows. Ideally, the tweezer should have relatively long bodies in order for the pattern to be more reliable as a reliable indicator.
In terms of spotting a tweezer, there are certain key characteristics that traders should look for. The first is that both candlesticks should have similar length bodies; this is to make sure that the reversal is more reliable and has more significance in the market. The second is that the tweezer should have almost identical highs or lows; the top of both candles should be the same and the bottom of both should also be the same.
The idea behind this technical analysis pattern is that when the highs or lows of two candles are exactly the same, it indicates a great level of indecision in the market. This can lead traders to believe that the current trend is either going to end, or at least consolidate, allowing them to position themselves to capitalize on the eventual breakout.
Overall, the tweezer is a simple yet reliable technical analysis pattern that can help traders identify market tops and bottoms. By looking for similarities in the highs or lows of two candles, traders can detect when there is an impending reversal. Its popularity stems in large part from the book Japanese Candlestick Charting Techniques, which provided detailed descriptions of how to accurately spot tweezers and capitalize on the trading opportunities that they present.