The next Japanese Candlestick reversal pattern that we are going to explore is the Tweezers Bottom. It is a two-candlestick bullish reversal pattern during a downtrend or a decline.

It signifies the end of the downtrend and the beginning of a sideways or upward move. Remember that after a reversal pattern a sideways movement may occur before the rally.

It consists of two or more candlesticks with matching lows. Ideally, the first candle has a long black real body where the second has a small body.

The significance of the matching lows lies in the fact that sellers fail to push prices to lower levels as they are running out of steam.

This is also indicated by the small size of the second real body that also signals indecision and hesitation to follow the established trend. Let’s take a look at the specifications of the Tweezers Bottom:

  1. Ideally a long black real body at the end of the downtrend
  2. The second candle may be small of any color
  3. Matching lows

Now, it’s time to explore any potential buy setup using the Tweezers Bottom. Well, a potential buy is seen just above the high of the pattern. Of course, the protective stop loss is seen below the matching lows.

I hope you enjoyed it. See you in a while.