tweezer patternby rb young the tweezer pattern is one that i was first exposed to over three years ago. some people call it a scissors or chopsticks pattern. all of these names seem to stem from the appearance that the pattern often takes on the chart. i understand that this pattern is not a part of the insider code basic course or any of the advanced material that mac x offers. for that reason alone you may decide to ignore this. i have no problem with that. you wont hurt my feelings just hit the delete key. nevertheless i have found it useful in certain market conditions. it definitely can make you money. one of the nuisances of a market such as we have right now (early oct08) is a choppy, fairly short range up-and-down sideways price action that can prove to be downright difficult, if not impossible, to trade. one minute (or one second) price action seems headed up, you take a position that looks prudent to you and youre no sooner in the trade then the price reverses and you are stopped out (or worse, upside down by 40+ pips). the tweezer is a pattern that has helped me to bring some order out of apparent market chaos. especially in choppy sideways markets. maybe it will be of use to you. the first step is to be able to recognize the pattern on a chart. the second step is to see it as it is developing. it does no good to see the pattern three hours later, when all you can do is say, ah, look at that!. i should of traded that. since a picture is supposed to be worth a thousand (or more) words, let me show you some recent tweezer patterns from charts and pairs you were probably just trading from this past week. then you can take your chart off of autoscroll, go back and mock trade the same pattern by using the f12/shift-f12 technique to hone your own skills in recognizing this pattern as it is developing. first, here are a couple of isolated tweezer patterns. these are probably the clearest example ive got and they are great introductions to the concept. a tweezer pattern is simply two candlesticks of nearly equal body length side-by-side. the pattern on the left is a bullish tweezer from an m5 gbpusd. with it pointing down why in the world is it considered bullish? because sellers tried to take the price down rapidly, but they were not successful at keeping it there. in the very next bar it retraced back to or past the starting point. thus the bulls won this one and we award the naming rights to the winner. it tells us where the price is likely to go next. so a bullish tweezer will always start out with a down bar, followed immediately by an up bar. ==================================================================================== the pattern on the right is a bearish tweezer. in this case the pattern was lifted from an h4 usdjpy chart. it is a bearish tweezer because buyers forced the price up, but were not strong enough to keep it there. who won? the bears did. who gets naming rights? correct. so a bearish tweezer will always start out with an up bar, followed immediately by a down bar. the best ones will stick up above (down below) the immediately previous price action, as these examples do.

============================================================================================ ===== these tweezers can form on just about any time frame. as is true with most patterns, the higher the time frame, the more time you have to react in order to place your trade. conversely, the lower the time frame you go to, a faster thought process and more nimble fingers are required. so i will provide examples on three different time frames for your viewing pleasure - one each on h1, m15 and the dreaded m5. and of course repeated exposure to the pattern will fry your brain allow you to recognize the pattern more easily. and if i give you several examples from several days and currency pairs, it might even make you a believer.

then i can sell you my course. ============================================================================================ ===== the first example (on the right) is from an h1 gbpusd chart. now you can immediately recognize this as a bullish tweezer. how? because it says so on the chart? noooo, nubie!. because the black bar came before the white bar and the bulls won this tussle. now, the black h1 candle body in this picture is exactly 105 pips. pretty good move down. in your former life you might have been tempted to jump on the wagon and go short. but as you can see, you would have been bitten. or your account would be bitten with a subsequent hole in it. but the next bar retraces almost back to the same point. the tweezer pattern is giving you a bullish signal. how and where to trade it? the entry point comes after the tweezer has finished forming the second bar. entry to go long will be above the previous down bars (black bar or bb) open (above the solid blue line). maximum potential on this one is over 170 pips. of course very few (if any) traders get the maximum. but you get the idea. you could have entered an 80/20 trade pulling the first one off at a conservative 23 pips and let the rest ride. ============================================================================================ =======

so now we are going to drop down to an example from an m15 chart. this one is from the eurusd currency pair. you will note that the bearish tweezers are poking up above the immediately previous price action, as the best ones will. walk through the scenario in this 15 minutes time frame with me. the price has climbed through the choppy mess to the left and achieved a new high. you might even have been looking for a break above the h1-based turquoise colored support/resistance zone. instead the next m15 bar opens and drops like someone has tied an anchor to it. its giving you a bearish tweezer. what to do? enter an order to go short after the black bar has closed with an entry based on the white bars open. in this example you would go short below a bid price of 1.3853. ride it down after maybe taking off your initial 80%. or if youre with the trend as you are here (32ema red is below the 64ema green) you might just leave the whole position in for the ride down. this one is so fresh at the time of this writing that it is not over because friday close (dotted line) came right where you see the last black bar ending. but truth be told, you probably would not leave the position open over the weekend just in case something happened while the markets were closed. like the israelis doing a bombing run over the skies of iran. something like that might mess up your trade so you had better close it with your 89 pips of profit just before closing of the market. this is so much fun. ============================================================================================ =======

now as if the previous example on the m15 wasnt daring enough for all you tic students, were going into forbidden territory on this next one. yep, the dreaded m5 chart (please dont tell mac x). this screen shot may look a little familiar. that is because the tweezer pattern were looking at is inside the one covered earlier on the h1 time frame of this gbpusd. this is a good example of where the earlier trade on h1 might not have been seen in time and if you had drilled down inside to the m5 chart you would have found this bullish tweezer forming. in this example the tweezer pattern is not clear of the immediately occurring earlier price action at the left, which is quite often the case on the m5 charts with this pattern. but thats okay because the tweezer pattern is giving a pretty clear signal in this m5 case. the black down bar starts off the pattern, but we cant tell whats going on until we see the white up bar reverse all the way back up. trade entry, as you would see this pattern becoming a possibility, would be to ready an entry but not enter it until the white up bar closed. after the white up bar had closed and it was clearly a tweezer pattern, then you would enter long above the black bars open price of 1.7708b (1.7783a). this one turned out to hold a total of about 50+ pips. as to your target, in an m5 tweezer trade i would definitely suggest a more modest goal for your profit take off at least the 80% at 23 pips with the other 20% left in for the ride. these tweezer patterns become quite easy to spot in choppy sideways markets and they should be added to your tool box. start looking for them when the market goes into a consolidation phase on the higher time frames. you should then see these showing up on the h4 thru the m5 charts. hope it makes you money. rich young 2008