Probability for Profits: Moderate
The the candlesticks for this particular pattern can be of any color combination.
Thus...the critical aspect is the equal highs.
Further, Tweezer Tops are often a multiple candlestick pattern. For example, being part of either a Bearish Harami, Bearish Hammer or a Bearish Engulfing pattern.
Our favorite Tweezer Tops occurs either as part of a Bearish Divergence with indicator or those that occur at/near key resistance levels.
In addition, we prefer the White-Dark(red) Tweezer Top combination as in the chart above.
More importantly, we noticed the probability for shorting profits increase considerably when the Dark(red) candles closes below or at the midpoint of the preceding White candlestick...Close <= (Close[1] + Open[1])/2
Further, we prefer there not to be any lower shadows in the Dark(red) candle that drop below the Open price of the White candlestick.
Why? A long lower shadow means that buyers arrived to bring price back up off the lows of that particular candlestick. This type of increased buying interest (rising prices because of increasing demand) could continue further into the next candlestick causing a trade loss when stop/loss protection is hit.
Note: Be careful of Tweezer Top patterns that form between a declining 200eMA and a rising 50eMA in the afternoon trading session.
