Double Candlestick Patterns

In making use of candlestick charts, traders should familiarize themselves with double candlestick patterns for better analysis. Here are a few you should know:

Engulfing Candlesticks

The bullish and bearish engulfing candlesticks are made up of two opposite moving candlesticks. In a bullish engulfing pattern, the first candlestick is a smaller bearish candlestick followed by a much larger second bullish candlestick.

The second candlestick body needs to be larger than the first candlestick body to “engulf” the first candlestick.

In a bearish engulfing candlestick pattern, the first candlestick should be a bullish candlestick, while the second should be a bearish candlestick. The second candlestick should have a body large enough that it engulfs the whole body of the first candlestick.

Note that each is a reversal pattern. When they appear, expect the market to rise or fall quickly after the candlestick is confirmed.

Tweezer Tops and Bottoms

A tweezer candlestick pattern is made up of two opposite bullish and bearish candlesticks. In a bearish tweezer top formation, the bullish candlestick is matched with a bearish candlestick equal in size. The opposite is true for tweezer bottoms.

The two wicks on the candlesticks should be equal in length, or very close to equal. This helps us confirm a top and bottom, because the two candlesticks that are part of the pattern indicate a touch to support or resistance, and then a reversal in the trend.

Double Doji

A double doji pattern is made up of two simple doji. Whereas a single doji indicates indecision, two doji indicate increasing volatility. When volatility increases and a currency pair picks a direction, get on and hold on! The double doji is known for putting some power behind breakouts and common chart patterns like the pennant formation.

Now that you have learned about all the double candlestick chart patterns, it’s time to move onto the triple candlestick patterns. The triple candlestick patterns are what you’ve been waiting for—the most powerful patterns for making big profits with forex!