More candlestick trend reversal patterns
July 25 (Reuters) -Our previous explainers (see links below) have covered the stronger trend reversal patterns within candlestick charts. The following pattern is usually not as potent but can still give warnings of a potential direction change.
Candlestick charts show a real body and shadows or wicks for a specific trading period. The real body is the shaded area between the open and close, and the shadows show the period's range extremes. These charts usually have black and white real bodies, denoting bearish and bullish sessions respectively.
Tweezer tops and bottoms can show up within mature trends. The tweezer formation can be made up of real bodies, shadows and/or doji candles. In an up-trend a tweezer top forms when two or more consecutive highs match. Stronger signals tend to have a large first candle followed by a candle with a small real body. In a downtrend the pattern forms when two or more consecutive lows match.
Tweezer signals can be strengthened if additional bullish or bearish reversal patterns show up within the tweezer formation.
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EUR/GBP daily candle chart: https://tmsnrt.rs/4bWzEXO
(Peter Stoneham is a Reuters market analyst. The views expressed are his own)
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