Types of Double Japanese Candlestick Patterns

 

 

Types of Double Japanese Candlestick Patterns

The four types of double Japanese candlestick patterns are the Bullish Engulfing Pattern, The Bearish Engulfing Pattern, the Tweezer Tops and the Tweezer Bottoms.

The Bullish Engulfing Pattern

Bullish Engulfing Candlestick

Bullish Engulfing Candlestick Pattern

The bullish engulfing pattern is a double candlestick pattern that indicates a possibility of a strong uptrend. It is formed right after the big bullish candle (green candle) completely overwhelms the small bearish candle (red candle).

This pattern indicates that the bulls have beaten the bears over the control of the asset price movement. It usually comes together with the recent downtrend hinting that the trend is about to end and a strong reversal or upthrust of the security is about to happen.

The Bearish Engulfing Pattern

The bearish engulfing pattern is the exact opposite of the bullish engulfing pattern. It is a dual candlestick pattern that indicates a possibility of a strong downtrend and it is formed right after the big bearish candle (red candle) completely overwhelms the small bullish candle (green candle).

This pattern indicates that the bears have wrestled over the control of the asset price movement. It usually comes together with the recent uptrend hinting that the price movement has hit its peak and a strong reversal or downtrend is about to occur.

The Tweezer Tops and the Tweezer Bottoms

Bearish Engulfing Candlestick Pattern

Bearish Engulfing Candlestick Pattern

Every traders know that it is better to enter the market at the beginning of a trend than at the end of it. Because of that they are always searching for opportunities to pounce into the market the moment the signs of a price reversal appear. And for some traders, they are even hoping to find a better advantage of getting in before the potential turn.

Fortunately for those who are unable to foresee where the price market is heading, there are reliable technical formations that can assist them to identify the change in the directions of the trend and one of them is the tweezer candlestick pattern. A tweezer or kenuki is one of the best indicators a trader should have as it indicates that the market trend may be ending soon.

There are two types of tweezer, the Tweezer Tops and the Tweezer Bottoms. Both are a double candlestick reversal pattern and they usually appear after a period of prolonged uptrend or downtrend suggesting that a price reversal is about to happen.

To identify an effective Tweezer either Tops or Bottoms, both candlesticks should consist of the following features:

  • For a tweezer tops, if it is an uptrend market, the first candlestick should be bullish and the following second candlestick should be the opposite, bearish.
  • For a tweezer bottoms, if it is a downtrend market, the first candlestick should be bearish and the following second candlestick bullish.
  • The length of the vertical lines or the shadows of both candlesticks should be equal.
  • For a tweezer tops, the highs of the first candle should be the same as the second candle while for a tweezer bottoms, the lows of the first candle should be the same as the second candle.

As usual in candlestick analysis, a trader must look at all angles before making any decisions regarding the security.

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