What are dual Japanese candlestick patterns?
In forex trading, traders and analysts use technical analysis to make more sound trading decisions. In technical analysis, traders and analysts maximize the use of charts. These charts include the line, bar, and Japanese candlestick chart patterns that Steve Nison learned from a fellow Japanese forex broker. He took an interest in candlestick charts, studied them thoroughly, and wrote about them eventually. Up to this day, they still prove that they can make our trading experiences better.
Japanese candlestick charts may have different patterns. Some may only consist of a single candlestick, while some may be dual or even triple. Today, we will tackle the second one: dual candlestick chart patterns. They can either be engulfing or tweezer patterns.
The first one: the engulfing candles
Under engulfing candles, we have the bullish engulfing candles and the bearish engulfing candles. In general, the term engulfs or engulfing means to sweep or surround something over completely.
The bullish engulfing pattern has two candlestick reversal patterns. It suggests that a strong move up might happen anytime soon. We see these when an even bigger bullish candle follows the first bearish candle. Furthermore, the second candle engulfs the first bearish candle, hence its given name: the engulfing candle. The buyers tend to make strong up move succeeding the latest downtrend or a consolidation period.
Bearish engulfing patterns are the complete opposite of the bullish engulfing patterns, as their name suggests. We see them when a bearish candle succeeds a bullish candle and completely engulfs it. Furthermore, the sellers were able to overpower the buyers. Likewise, a strong move down might also happen anytime soon.
The second one: tweezer patterns
Tweezer patterns consist of two candlestick reversal patterns. We can usually encounter these after long-time downtrends or uptrends. They give us a hint that a reversal is about to happen. Under tweezer patterns, we have tweezer bottoms and tweezer tops. If we look at a technical analysis chart, one can say that the formation of the tweezers pattern does look like the tweezers that we use in real life.
There are many tweezers, but the most effective ones possess these characteristics:
- The first candlestick. It is the same as the overall trend. If the price is moving in the upper direction, then this first candle should be bullish.
- The second candlestick. It is opposite the overall trend. If the price is moving in the upper direction, then this second candlestick should be bearish.
- The shadows. Their shadows should have an equal length. If they are not equal, then they should at least be close or near equal as well.
- The tweezer tops. The highs should be the same.
- Tweezer bottoms. The lows should be the same.
A little summary
If you are looking for dual Japanese candlesticks formations, look for formations that have two total candlesticks. We have engulfing candles that can either be a bullish or bearish engulfing pattern, and we also have tweezers patterns that can be tweezers tops or tweezers bottoms. These might be challenging for now, but with a little more practice and patience, these patterns will surely help make better trading decisions!