Are you familiar with the different types of candle patterns? There are many, many different types, but you have to know the most important ones that you’re going to need while trading. Of course, this depends mainly on what kind of trader you are.
For instance, if you’re a price action trader, it’s best to learn all about the tweezers top and the tweezers bottom candles commonly used in railway tracks candles patterns.
If you’ve never heard of that strategy before, then you’ve come to the right place! In this article, we’ll tell you all about the railway tracks candle pattern and how you can use this strategy to gain in trades on Binomo.
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What are the tweezers top and the tweezers bottom candles?
Tweezers tops and tweezers bottoms aren’t very hard to identify. They’re the candles with a solid body and an obvious wick, either at the top or the bottom. It’s important that you learn how to recognize them because they can greatly help you in spotting a trend reversal early. If you’re someone who prefers holding long positions, you’ll also see plenty of benefit in knowing how to identify this specific type of candles.
Most importantly, tweezers top and tweezers bottom candles are the most vital part of railway tracks candles patterns.
What are railway tracks candles patterns?
The term “railway tracks candles patterns” refers to a pattern of two candlesticks. The name comes from the appearance of the candles. Since they’re right next to each other, they look kind of similar to railway tracks.
There are three main conditions for a pattern to be considered railway tracks candles pattern:
- There should be only two candlesticks side by side.
- They must be of the same length.
- It doesn’t matter which one comes first, one has to be bearish and one has to be bullish.
This pattern is very important because it’s an easy way to tell if there’s a sudden change in market movement. For example, if the market is on an uptrend and you suddenly see this candle pattern, there’s a big possibility that it will turn into a downtrend.
In other words, you can use this pattern as your signal that the trend will reverse soon. In fact, it’s a rather clear signal that you should probably rethink your decisions up to this point to reflect the trend reversal.
Trading using the railway tracks pattern on Binomo
As mentioned above, you can implement this pattern into your strategy to serve as your clear signal for trend reversals.
If you’ve been watching the market on an uptrend for a while and you see this pattern, it’s very likely that the prices will start falling soon, so make your trades accordingly. Get into a sell position as soon as you can in order to cut any possible losses from the oncoming downtrend.
On the other hand, if you’ve been observing a downtrend and you see a railway tracks pattern with a bullish second candle, it likely means that the prices will start going up soon. Better get into a buy position in order to reap all the benefits from the expected uptrend.
One thing to note is that railway tracks candles don’t always need to have the exact same size, just like in the chart above. Sometimes, as long as their wicks end at roughly the same level, they’re already good enough as a signal that a trend reversal is going to happen.
When should I use the railway tracks candles pattern?
This pattern is so useful that you can honestly use it anywhere regardless of your strategy. However, it works best if you’re holding a long position that lasts for more than 15 minutes since new trends don’t usually develop that quickly.
That said, if a market has clear trends, this pattern will work perfectly.
Did you like our article? Now that you know how to use the railway tracks candles pattern, don’t hesitate to open a free practice account on Binomo so that you can try it out yourself!
Good luck with your trading journey!