What does the Spinning Top Candlestick tells you? Learn how to trade Spinning Top

Spinning top candlestick shows a sign of indecision about the future direction of your trading. Watch our latest video to find out how to trade Spinning Top.

How to trade Spinning Top – why is it different than Doji?

Hello, everyone. Today, we are going to go over another Candlestick pattern that you can integrate into your daily trading. It is an easy one to spot on the chart and one that you will find almost every day in your trading when you go over some charts. So, this Candlestick pattern that we are going to discuss today is called, Spinning Top pattern and it is very, very similar to Doji Candlestick. However, it’s a bit different. What is this Candlestick about? It’s a show or a sign of indecision about the future direction of the object, of the Forex pair, or, in general, of the assets, whatever you trade stocks or cryptos or commodities, whatever. The Spinning Top is the same everywhere. It’s about indecision. As I said, it’s similar to Doji. However, it differs from Doji, because, unlike Doji, who has no body, the Spinning Top has a body. So, you have a long upper weak, you have a long lower weak and then you have a small body in the middle of it, which means that actually there is a difference between opening and closing price. Whereas with the Doji, you have more or less no difference between the opening and closing price. You can see the Doji here. So, there are more or less like neighbors in this case, and it tells you that there it’s indecision time for the traders and if you look, if you analyze this chart, here you have another Spinning Top, you can see more or less, we are a very similar length in both weaks. And then you have Doji, and then you have a green Candle and then you have a red Candle and then down and then a new high. So, it’s a very choppy trend action. And when you manage to spot these Candles, both Spinning Top and Doji, usually, if you find them in the middle of the chart, then my advice is that you take no further action when it comes to the trading, while I am going to try and to briefly explain to you what is my advice to you, if you find them in either high of an uptrend or a bottom of the downtrend.

So, here we have a small uptrend and then, as I said, we have a Spinning Top, we have a small body, we have two long weaks, which means there’s indecision. When you find Spinning Top or Doji or combined at the top of an uptrend, usually it means that they’re going to reverse, since the Bulls have no more full control of the trend, but it is a choppy price action. And mostly, we are going to see a trend reversal. As I said, the Bulls are losing their control and the trend may reverse. The same is on the downtrend. So, again, it’s a nice chart since you are going to see this a lot, especially when you see a strong uptrend that is coming to an end and you see fatigue. In this case both. This is what you see, you see many, many weaks. Look, you have Shooting Stars, you have Dojis, you have Spinning Tops. With a combination of not so bullish Candlestick patterns, and this, means fatigue. As I said, this group of candles and they are going to reverse down, they’re going to push down either a smooth correction, before continuing higher or we’re going to create a bigger move to downside, and, as you can see, this exactly happens on a one-hour chart, we make 100 pips correction. Dollar/CAD, the same story, a Shooting Star, Spinning Top, a Doji, indecision time. We have a strong uptrend but we are tired. We actually start to be tired here, but it somehow managed to grind higher, grind higher, grind higher and then, finally we get tired and we start creating new lows that you can see the downside in the price starts correcting. So, unlike Shooting Star or Hammer, where you can directly trade it, for example, with Shooting Star, you just put your Stop-Loss above it and then you can hope for a move below. In the Spinning Top and Doji you actually have a sign that the trend may reverse, if you’re at the bottom or at the top as I said, if you’re in the middle then, like for example here, it’s nowhere, it’s not a new high, it’s not a new low, then my advice to you would be to avoid the price chart and wait for extremes, either higher or a lower one.