Engulfing Candles
The bullish engulfing
pattern is a two candle stick pattern that signals a strong up move may be
coming. It happens when a bearish candle is immediately followed by a larger
bullish candle.
This
second candle "engulfs" the bearish candle. This means buyers are
flexing their muscles and that there could be a strong up move after a recent
downtrend or a period of consolidation.
On the other hand, the bearish
engulfing pattern is the opposite of the bullish pattern. This
type of pattern occurs when bullish candle is immediately followed by a bearish
candle that completely "engulfs" it. This means that sellers
overpowered the buyers and that a strong move down could happen.
Tweezer Bottoms and Tops
The
tweezers are dual candlestick reversal patterns. This type of candlestick
pattern could usually be spotted after an extended up trend or downtrend,
indicating that a reversal will soon occur.
Notice
how the candlestick formation looks just like a pair of tweezers!
Amazing!
The most effective tweezers have the following characteristics:
·
The first candle is the same as the overall trend. If price is
moving up, then the first candle should be bullish.
·
The second candle is opposite the overall trend. If price is
moving up, then the second candle should be bearish.
·
The shadows of the candles should be of equal length. Tweezer tops
should have the same highs, while tweezer bottoms should have the same lows.
