Tweezer Bottom Candlestick Pattern: How to Identify & Trade It

Markets rarely move in a straight line. Even in a strong downtrend, there are moments when the price finds support and buyers step in. 

The Tweezer Bottom candlestick pattern is a signal that sellers may be running out of steam, and a reversal could be on the horizon. This pattern appears when the price reaches the same low on two consecutive candles but fails to break lower, suggesting that support is holding.

Understanding this pattern and its context can help traders spot possible buying opportunities before they become obvious to the rest of the market.

This guide explains how the Tweezer Bottom pattern works, what it tells traders about market sentiment, and how to use it effectively in trading.

The Tweezer Bottom is a two-candle bullish reversal pattern that forms at the bottom of a downtrend. A report by Bulkowski indicates the best percentage meeting the price target: 71%, suggesting bullish reversals. 

It signals that sellers tried to push the price lower on two consecutive sessions but failed, as buyers stepped in at the same price level both times.

The first candle is usually bearish, showing that sellers are still in control. The second candle is bullish, signaling that buyers have entered the market and may be ready to push prices higher. 

This pattern suggests that the market has found a strong support level and could be ready for a reversal.

Key Characteristics of the Tweezer Bottom Pattern:

• Appears after a downtrend, signaling potential support.
• Two consecutive candles with the same or nearly identical lows.
• The first candle is usually bearish, showing continued selling pressure.
• The second candle is bullish, indicating that buyers are stepping in.
• Traders look for confirmation from the next few candles before making a trade.

The Tweezer Bottom candlestick pattern is illustrated below.

• Forms after a downtrend, signaling possible exhaustion of selling pressure.
• Two consecutive candles with nearly identical lows indicate strong support.
• The first candle is bearish, showing continued selling pressure.
• The second candle is bullish, showing that buyers have stepped in.
• Traders often wait for confirmation from the next few candles before taking action.

The Tweezer Bottom pattern represents a battle between buyers and sellers. The first candle suggests that sellers still have control, pushing the price lower. However, the second candle shows that buyers prevented further losses, creating a strong support level.

This shift in sentiment suggests that selling momentum may be fading, increasing the chances of a trend reversal. If the next candle confirms the pattern with further upside movement, traders interpret this as a sign that buying pressure is increasing.

Market Conditions

The Tweezer Bottom is most effective after a strong downtrend, signaling that sellers may be running out of momentum. It often appears at support levels or near previous swing lows, making it more significant in those areas. If the pattern forms in a sideways market, it may indicate short-term hesitation rather than a major reversal.

Volatility Considerations

In high-volatility markets, the Tweezer Bottom may be less reliable since price action can temporarily break through support before reversing. This pattern can carry more weight in low-volatility environments, as repeated rejection at the same level often leads to a trend shift.

• Stop-loss placement: Below the low of the Tweezer Bottom to protect against false breakdowns.
• Entry strategy: Traders often enter after bullish confirmation, such as a breakout above the second candle’s high.
• Profit target: Use resistance levels or a risk-reward ratio (e.g., 2:1) to set an appropriate exit.

• Break below support: If the price moves below the lows of the Tweezer Bottom, the bullish signal is invalidated.
• Lack of follow-through buying: The pattern may fail if the next candles do not confirm bullish momentum.
• Strong downtrend continuation: If overall market momentum remains bearish, buyers may be unable to push the price higher.

To trade the Tweezer Bottom in a systematic approach:

1. Identify a strong downtrend before the pattern forms.
2. Detect a Tweezer Bottom with two consecutive candles having similar lows.
3. Require confirmation: Enter long only if the next candle confirms bullish movement.
4. Set stop-loss below the Tweezer Bottom’s low.
5. Backtest before using real capital.

Traders should always test historical data before using this pattern in live trading.

Below is a simple AFL script to detect the Tweezer Bottom in Amibroker:

// Tweezer Bottom AFL Code for Amibroker

_SECTION_BEGIN(“Tweezer Bottom”);

SameLow = (Ref(Low, -1) == Low);

FirstBearish = Ref(Close, -1) < Ref(Open, -1);

SecondBullish = Close > Open;

TweezerBottom = SameLow AND FirstBearish AND SecondBullish;

PlotShapes(IIf(TweezerBottom, shapeStar, shapeNone), colorGreen, 0, Low);

_SECTION_END();

This script finds Tweezer Bottom patterns and marks them with a green star.

The Tweezer Bottom candlestick is a potential bullish reversal pattern that appears after a downtrend. 

It signals that sellers have hit a strong support level, and buyers are beginning to take control. However, confirmation from the next few candles is crucial before making trading decisions.

Using risk management and waiting for confirmation can help traders avoid false signals. If you want to incorporate this pattern into your strategy, test it in different markets before using it in live trading.

Links to articles about other Candlestick Patterns

1. Doji
2. Hammer
3. Inverted Hammer
4. Bullish Engulfing
5. Bearish Engulfing
6. Morning Star
7. Evening Star
8. Shooting Star
9. Hanging Man
10. Piercing Pattern
11. Dark Cloud Cover
12. Three White Soldiers
13. Three Black Crows
14. Dragonfly Doji
15. Gravestone Doji
16. Spinning Top
17. Marubozu
18. Tweezer Top
19. Tweezer Bottom
20. Bullish Harami 
21. Bearish Harami
22. Rising Three Methods
23. Falling Three Methods
24. Bullish Abandoned Baby 
25. Bearish Abandoned Baby 
26. Bullish Kicker 
27. Bearish Kicker
28. Three Inside Up
29. Three Inside Down
30. Upside Gap Two Crows
31. Mat Hold
32. Upside Tasuki Gap
33. Downside Tasuki Gap