Spinning Tops Candle becomes a pattern that will describe a situation where sellers or buyers cannot make a profit. Spinning Tops Candle itself can be a bearish or bullish condition. For more details about spinning tops candles, you can read the article below. But before that, make sure you have registered an account at GIC and do forex trading with us!

Understanding Spinning Tops Candlesticks

Spinning top candlestick is a pattern with a short body between the long upper and lower wicks. Spinning top depicts a scenario where neither sellers nor buyers gain any profit. It results in the same opening and closing price units. The formation of a spinning top candlestick helps determine the possibility of a price reversal especially if it occurs after a price decline. Due to the small variation in the market trend, the candlestick is referred to as a continuation pattern.
 
The formation of the candlestick shows a level of indecision between buyers and sellers, which depicts a price reversal, thus creating a neutral pattern. At the close of the candle, the spinning top can be either bearish or bullish. However, candlestick patterns are mostly found in uptrends, downtrends, and sideways movements, indicating a potential reversal. Bullish trends increase prices further, while bearish trends decrease prices until the overall price closes where it opened.

Characteristics of Spinning Tops Pattern

Spinning tops are one of the most common candlestick patterns, making them very easy to spot on most charts. They are most often found at the beginning or end of short, medium or long-term trends with short real bodies and long shadows, but they can appear almost anywhere. TrendSpider automatically identifies spinning tops with mathematical precision. You can quickly highlight all spinning top patterns on a chart or even set up custom alerts that combine them. This can be very helpful for seeing confirmation at a glance or adding them to your strategy.



Spinning Tops on TrendSpider – Source: TrendSpider As you can see in this example, there are many different spinning tops appearing on the chart. It can be difficult to figure out which patterns are truly important and separate the signal from the noise. We will look at how to read and interpret spinning tops in the next section. If you are trying to find spinning top candles on your chart, look for a symmetrical pattern with equal length upper and lower shadows. The main body is relatively small and shows only a small difference between the open and close.

Its unique appearance is due to the market pull caused by buyers and sellers. Buyers tried to push the price up, while sellers tried to lower it, but both failed to sustain the change. The result is a short-bodied candle with elongated shadows on both sides. This may indicate that market participants are losing confidence in the current trend, and a reversal is just around the corner.

Example of a Spinning Tops Candle Pattern

The spinning tops candlestick pattern is easy to spot on a price chart. An example of a spinning tops candlestick pattern is highlighted in the chart below.
On the left side of the 4-hour Bitcoin price chart above, there are two examples of spinning top candles. As a result, price is heading higher, and in hindsight, one could have bought BTCUSD at that level with a protective stop-loss just below the spinning top candle low. The fact that we have two consecutive spinning tops developing one after the other adds more confirmation to the bullish case scenario.
 
The second spinning top candle developed at the end of an uptrend, and was followed by a large price reversal. The large downward candle that followed this spinning top candle confirmed the impending reversal. The final example of a spinning top candle occurred after price had bottomed out. This bullish reversal signal occurred at a major support level where the previous candlestick had bounced off. Thus, this spinning top candle ultimately signaled a surge to the upside.

How to Use a Spinning Top

Trading the spinning top candlestick pattern can be tricky. It is not a pattern that gives you a clear signal to enter or exit a position like the triple bottom pattern, or the hanging man pattern. Instead, it is a neutral candle that can be interpreted as a situation of indecision among market participants. Thus, you need to use this candlestick pattern as another tool to predict trend reversals and combine it with other technical indicators to confirm the reversal.

Di bawah ini, kami akan menunjukkan kepada Anda dua jenis pola spinning top yang dikombinasikan dengan level support dan resistance Fibonacci – pola spinning top bullish dan bearish.  Setelah membuat akun perdagangan, pedagang harus dapat mengidentifikasi candle spinning tops dengan badan pendek dan sumbu panjang di kedua sisi dan menemukan tren pasar menggunakan indikator teknis atau pola tren.

However, each trading method comes with a different risk description. Therefore, traders should indicate the name of the asset they want to trade in the search bar. After confirming the upcoming reversal, traders can proceed and select the buy or sell option in the trading ticket.

How to Read and Trade Using Spinning Top Candles

Most traders use indicators to confirm the spinning top signal and gather more facts about the price trend. Trading with the spinning top pattern can be done using derivatives such as trading contracts for difference (CFDs). This means that traders do not need to own the underlying asset but can speculate on its price pattern. For example, if a trader believes that a spinning top at the support of a downtrend may indicate an approaching reversal, testing the signal will help predict the price pattern because it shows a certain market momentum at a certain time.
 
However, a trader needs to apply technical indicators and signals to analyze the trading movement. Such analysis will protect the trader from deviating from the trading pattern and stay within the risk management plan. There are several ways to trade when you see a spinning top candlestick pattern. The first important step is to confirm the signal. Most traders use technical indicators to confirm what they believe is a spinning signal, as these indicators can provide more insight into the price trend.
 
For example, if you think that a spinning top at the bottom of a downtrend may indicate an upcoming reversal, you can test the signal using the stochastic oscillator. This indicator can help you predict price movements because it shows the speed and momentum of the market over a certain period of time. If the upcoming reversal is confirmed, you may want to buy (go long). To trade when you see a spinning top candlestick pattern, you can use derivatives such as spread betting or CFDs.

With derivatives, you do not take ownership of the underlying asset, but speculate on its price movements. This means you can trade both rising and falling markets to take action on bullish and bearish spinning tops. Follow these steps to trade when you see a spinning top candlestick chart pattern:
  1. Create a trading account or log in to your existing account
  2. Type the name of the asset you want to trade in the search bar.
  3. Enter your position size
  4. Select 'buy' or 'sell' on the deal ticket
  5. Trade confirmation

Advantages of Trading Using Spinning Top

Listed below are the main advantages of trading the Spinning Top Pattern:
  1. They are easily recognized by their short, distinct bodies and long, symmetrical axes.
  2. They managed to show market indecision and slowing momentum.
  3. They work well with other technical analysis tools, especially MACD.
After learning about spinning tops candles and related things such as advantages, how to read, characteristics, examples, and others, then you will benefit from using this spinning top candle yourself. Make sure you also read other articles such as Bearish Hammer Candlestick: Characteristics, How to Use, and Examples.