Candlestick Mastery · Module 06 of 15

Two-Candle Patterns

Context is key — patterns form in relation. Two candles together say more than either alone.

When one candle answers another

Some of the most reliable signals need two candles: the second reacting to the first. The relationship between them is the message.

BULLISH ENGULFINGDARK CLOUD COVERTWEEZER BOTTOM
three two-candle patterns — bullish engulfing, dark cloud cover, tweezer bottom
  • Bullish / Bearish Engulfing — a small candle completely swallowed by a large opposite one. Bullish engulfing: a small red candle overwhelmed by a large green — buyers seized control decisively. Bearish engulfing is the mirror. The larger and cleaner the engulfing candle, the stronger the signal.
  • Piercing Line / Dark Cloud Cover — a two-candle partial reversal. Piercing Line: after a red candle, a green one closes back above the midpoint of the red — buyers recovering ground. Dark Cloud Cover is the bearish mirror: a red candle closing below the midpoint of the prior green.
  • Tweezer Top / Bottom — two candles with matching highs (top) or matching lows (bottom). The market tested the same level twice and was rejected both times — a sign the level is holding and a reversal may follow.
In short

Engulfing = decisive takeover; Piercing/Dark Cloud = partial reversal; Tweezers = a level tested twice and held.

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