The Tweezer Top formation is viewed as a bearish reversal pattern seen at the top of uptrends and the Tweezer Bottom formation is viewed as a bullish reversal pattern seen at the bottom of downtrends. Sometimes Tweezer Tops or Bottoms have tweezer pattern forex factory candlesticks. The market opens and goes straight down, often eliminating the entire gains of Day 1.
Nevertheless, Day 2 is completely opposite because prices open and go nowhere but upwards. This bullish advance on Day 2 sometimes eliminates all losses from the previous day. Day 2 opened where prices closed on Day 1 and went straight up, reversing the losses of Day 2. A potential buy signal might be given on the day after the Tweezer Bottom, if there were other confirming signals. A tweezer formation is comprised of two candlesticks with wicks of equivalent highs. This then suggests that the market may have reached a high or a low for that moment and a reversal is imminent. There are two types of tweezer formations, there are tweezer tops and tweezer bottoms.
Both of these formations are usually reversal formations in that they point to a change in the direction of the trend, be it short term or long term. In a case where the market has formed tweezer bottoms for instance. This then means that the market has reached a low for that moment as such one should expect a reversal either swing. This shows that there is a still bearish momentum in the market, however, the wick indicates that there is buying momentum present that time. In most instances, these type of formations mark market turning points. For instance, have a look at the chart below as this is principle is illustrated.