Double Trouble - Dual Candlestick Patterns

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.

1. What is a Japanese Candlestick?
2. Sexy Bodies and Strange Shadows
3. Basic Candlestick Patterns
4. Lone Rangers - Single Candlestick Patterns
5. Double Trouble - Dual Candlestick Patterns
6. Three's Not A Crowd - Triple Candlestick Patterns
7. Japanese Candlesticks Cheat Sheet
8. Summary: Japanese Candlesticks

Forex Training in the School of Pipsology