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A two-candle bearish reversal pattern where consecutive candles share the same high, signaling resistance and potential trend change.
Tweezer Tops is a two-candle bearish reversal pattern that forms at the top of an uptrend. It consists of two consecutive candles that share the same or nearly the same high price, creating a "tweezers" appearance at the resistance level.
The pattern gets its name from the resemblance to a pair of tweezers - the matching highs create two parallel points at the top. The first candle is typically bullish (continuing the uptrend) and the second is bearish, showing the rejection of higher prices.
Tweezer Tops represent a failed breakout at a precise price level. The first candle pushes to a new high, establishing a level where sellers appear. The second candle tests this exact level and fails again, confirming it as resistance.
This double test and rejection is significant because it shows that the market tried twice to break through and couldn't. Bulls had two opportunities to push higher and were denied both times. This creates a strong psychological barrier.
When the second candle closes bearish, it signals that sellers have taken control. The matching highs act as a ceiling, and traders who bought near the top may begin to exit, accelerating the reversal.
Conservative: Enter short on a break below the second candle's low, confirmed by bearish follow-through.
Aggressive: Enter short at the close of the second (bearish) candle if at strong resistance.
Place stop above the matching highs (the tweezer level). This is the pattern's resistance - if price breaks above, the signal is invalidated.
T1: Previous swing low or nearest support level. T2: Measured move equal to the height of the bullish candle projected downward. T3: Use trailing stop for trend continuation.
Minimum 1:2 R:R required. Tight stop above highs often provides favorable risk/reward.
Tweezer Tops gain power from their location. The same pattern formation can be a strong reversal signal or meaningless noise depending on where it forms.
Two candles with matching highs show sellers defending that level twice. The more precise the match, the stronger the resistance.
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