TA Series Part 4: Dual and Triple candlestick patterns

TA Series Part 4: Dual and Triple candlestick patterns

In the previous post, I have discussed about candlestick’s history, its inventor as well as a few common single candlestick patterns. As a continuation of the previous post, I will now discuss about the dual candlestick patterns as well as triple candlestick patterns. More advanced patterns will not only indicate turning signals, but also show trend confirmation that can give investor more confidence to take action in the market. At the end of this post, you should be able to identify most common chart patterns, and read between the candlesticks.

Dual candlestick pattern

Tweezer top and bottom


Tweezers do look like those things that you use to pluck your eyebrows. These patterns have the following characteristics:

1. First candle same as overall trend
2. Second candle looks very similar to the first candle, but opposite from overall trend
3. Lower or upper shadow of the candles have very similar length

Interpretation: Tweezers show that at first bulls (or bears) were still in charge of the market, however in the next time frame, the same bulls turned into bears (or bulls) and take charge of the market. In other words, investors behave in an almost exactly opposite manner between the two-time frames. Such pattern is a very strong signal that a trend reversal will occur soon.
Admittedly, this pattern is one of the harder one to spot, however if you backtrack any charts, tweezer gives out correct signal most of the time. Hence if such pattern emerges, you should be ready for any pattern reversal.

Bullish engulfing

As the name suggest, this patterns literally consists of a bullish (green or white) candlestick that engulfs the bearish candlestick that comes before it. Such pattern only has one characteristic:
1. Bearish candle immediately followed by larger bullish candle

Interpretation: This pattern is relatively easier to interpret. It shows that buyers overpowered sellers, hence it is signaling a very strong buying pressure in the market. There is a high chance of upward movement right after such pattern. A trend will be formed if the upward movement is further confirmed by the triple candlestick pattern (will be explained later).
I would say that this pattern is my most favourite pattern as based on my personal experience, it is a very accurate signal to indicate whether the bull or the bear is currently owning the market. A very high chance that the following candlestick will be bullish following the market sentiment at that moment.





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