Spinning top - Candlesticks


-A Technical Analysis View-
From a Forex trading perspective, Spinning tops are candlesticks that depict indecision or a pending trend-reversal in the market.

Indecision in the market indicates loss of momentum from both buyers and sellers. An indication that neither buyers nor sellers are in control at that moment. A situation where a trader embraces wait and observe mode.

Therefore, when a Spinning top candlestick forms following an up-trend (bullish market), it depicts – buyers losing momentum (Bullish Spinning tops).

Likewise, when a Spinning top candlestick forms following a down-trend (bearish market), it depicts sellers losing momentum (Bearish Spinning tops).


(Pic. Courtesy of swagforex)

Two prominent features are indicative of a spinning top candlestick, namely: –
  • Small body with (long) wicks/shadows extending from both upper and lower sides.
  • Upper and Lower wicks often equal in length.
Essentially, wicks indicate the following: –
  • Upper wick signify that; sellers were in control/had an upper hand at one point during the given period.
  • Lower wick signify that; buyers were in control/had an upper hand at one point during the given period.
NB: A spinning top candles resemble Doji candles. However, a Spinning candlestick has a body while a Doji candlestick has no body.
In other words, opening and closing prices of a Spinning top are different, while opening and closing prices for a Doji is the same. (Ref. Doji)

The ability to correctly identify trends and trend-reversals in particular assist traders to avoid misleading price actions and ill-informed predictions.

In all, Spinning top candlesticks indicate moments of indecision, neutrality or uncertainty in the market, where no side (buyers or sellers) is dominant over the other. A time to carefully analyze the market and importantly avoid rash decisions.

OJ Mwale – Sani Global Forex
For active Forex trading visit: –
https://tinyurl.com/ybzts6da
https://amzn.to/2LY2j3D

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