Forex Spinning Top


Trendlines and chart patterns work very well with candlestick patterns. Spinning top forex candlestick patterns combined with chart patterns or trendlines is a very effective price action-based trading strategy. Therefore, a spinning top can signal a flip from bullish to bearish or bearish to bullish sentiment. However, most traders use other confirmations, including the trend that the pattern is forming in, as well as nearby support and resistance. Trading the spinning top candlesticks can be profitable, but it requires patience and discipline to wait for confirmation before entering trades. It’s important to always manage risk by using stop-loss orders and setting realistic profit targets.

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Finally, the spinning top candlestick indicates that there is a certain level of volatility in the market, as buyers and sellers are competing. This could indicate that the market is about to make a significant move in either direction. Second, the wicks of the spinning top candlestick are generally quite long, relative to the body. This indicates that buyers and sellers are competing but neither side is able to gain control. Spinning tops at support and resistance levels, supply and demand zones, or fib retracements have a much higher probability of indicating a reversal.

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Price is simply rotating higher and lower in a tight tug of war. The spinning top shows the same information just over one candlestick and not many. Seeing one tells you the bulls and bears are really fighting it out – hence why the wicks are so big.

  • One of the main benefits of spinning top candlestick is that it can help you identify potential reversals in the price of an asset.
  • Leveraged trading in foreign currency or off-exchange products on margin carries significant risk and may not be suitable for all investors.
  • It usually becomes the first part of a bullish continuation or a bullish reversal pattern.
  • The candlestick pattern indicates the uncertainty of the future trend of an asset where the traders are unable to sustain the price of a commodity.
  • While the Spinning Tops have longer upper and lower wicks, the Dojis have shorter upper and lower wicks.
  • Identify a spinning top candlestick on a chart – Look for a candlestick with small real body and long upper and lower shadows.

Many traders discount these candles as insignificant, but they’re actually really important. An end to a strong impulsive move upside has actually started with a spinning top pattern. You can either wait for a confirmation candle or open a trade as soon as the spinning top formation is created. A stop-loss order should be placed just above the previous high. It means that a spinning top may alert about an upcoming crucial change in a trend.

Spinning Top Trading Strategies

Trade up today – join thousands of traders who choose a mobile-first broker. With that in mind, let’s see what the spinning top pattern looks like on a trading chart. Chart patterns Understand how to read the charts like a pro trader. There are a host of methods to determine your profit target and will depend on your trading style. For me, I like to use pivot point levels and Fibonacci extensions to determine when to exit my position. To learn more about profit targets with pivot points, please check out our article here. that appear at higher timeframes such as daily, weekly, & monthly are more significant than those which appear within intraday timeframes. If one of the shadows touches a support or a resistance line, or even breaches it temporarily, this will add weight to the case for a reversal. The Keltner Channel or KC is a technical indicator that consists of volatility-based bands set above and below a moving average. The buying pressure causing the uptrend is paused for a moment of indecision , and that lost momentum could signal that the current trend has come to an end. But within the session, the buyers and the sellers both had the upper hand at one point, which shown by the long upper and lower shadows. Similar in shape to its toy counterpart, a Spinning Top has a short body and two long shadows.

This is easier if the price is trapped within a narrow range. The first one, on the left, occurs after a small price decline. It is followed by a down candle, indicating a further price slide. The price does head a bit lower but then reverses to the upside.

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The long wick signals sellers tried to push price lower, but buyers came back and steered price higher back to the opening price. The indecision becomes more significant when the price forms at least 2 spinning top candles in a row. Often after the market breaks out from such long consolidations, we can see a strong impulse move in either direction. Here is a figure showing the shape of spinning tops candlestick patterns. The indecision comes about given that buyers and sellers try to push prices up and down, respectively, but to no avail.


By recognizing this chart pattern, you can better anticipate when the price of an asset is likely to move in either direction. A spinning top candlestick is a type of chart pattern used in technical analysis to identify potential reversals in the price of an asset. It is comprised of a single candle with a small body and relatively long wicks on both sides. The most important thing you should take from the lesson is that dojis and spinning tops signify neutrality in the market – not a reversal in price. Want to learn how to trade the spinning top and doji candlestick pattern?

In the other, a bearish spinning top pattern occurs at the top of a trend and may signal a price reversal and a new trend direction. The candlestick pattern indicates the uncertainty of the future trend of an asset where the traders are unable to sustain the price of a commodity. Spinning top candlestick is a pattern with a short body between an upper and a lower long wick. The spinning top illustrates a scenario where neither the seller nor the buyer has gained. The kind of Japanese candlesticks that have small bodies but long shadows is called Spinning Tops.

A Harami cross pattern occurs in a downtrend and signals a trend is about to reverse amid waning short-selling pressure. That being said, it is not always that easy to identify the spinning top patterns that are most likely going to lead to a trend reversal, especially when you are trading in real time. A dragonfly doji is a candlestick pattern that signals a possible price reversal. The candle is composed of a long lower shadow and an open, high, and close price that equal each other.

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Traders all over the world prefer Japanese Candlesticks to strengthen their trading decisions. Different patterns of Japanese Candlesticks are used and analyzed for sound trading decisions. Spinning Top is the most widely preferred pattern of Japanese Candlesticks and indicator and second one is price channels.

Spinning Top Candlestick Definition – Investopedia

Spinning Top Candlestick Definition.

Posted: Sat, 25 Mar 2017 20:02:45 GMT [source]

Understanding that where the pattern forms and in what type of price action situation it forms is key. With this candlestick price tried to move higher and also tried to move lower, but in the end it could not make a move in either direction. This candlestick is showing that price moved both higher and lower around the same amount during the session, but ultimately at the end it closed close to where it started. A spinning top in this candlestick is known as a neutral pattern, even though numerous of them end in reversed positions. The Spinning Top Candlestick refers to a formation that shows indecision with the succeeding trend direction. Investing in derivative products carries significant risks and is not suitable for all investors.

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If taking trades based on candlesticks, this highlights the importance of having a plan and managing risk after the candlestick. Doji candlesticks are those who’s opening and closing price is the same. They usually have relatively small upper and lower shadows, although there are exceptions. Set profit targets – Determine profit targets based on support and resistance levels, Fibonacci retracements or other technical analysis tools. However, it is not wise to make trade decisions depending on one candle. So experts often wait for a few next candles to ensure future price directions.

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Here the bearish bar is almost entirely engulfing the bullish and is drawing the price lower. After the first tweezer we then see the market rising higher again. When the black candlestick is longer than the white the pattern can also be a bearish engulfing. This is usually treated as a stronger reversal sign than a tweezer top. This is especially true if the engulfing candlestick generates a deep price fall. As with almost all candlestick patterns, the role of the next candle is important.

Các thuật ngữ trong forex quan trọng, hay dùng cho Trader

A spinning top appears 4 -5 hours after price enters the zone – some would call this a doji, but it’s really a spinning top. With that in mind, we can use spinning tops as hints on whether a reversal/retracement is near. That said, depending on when and where they form, they can give you some really important clues on what’s going on behind the scenes with the bulls and the bears. The classic game of Simon Says is another great activity to incorporate into spinning tops, especially if you and your friends like to learn new tricks. Have one person be Simon and conduct different tricks with the tops, such as cool spins or flips, and have others follow suit and replicate them.

  • Any statements about profits or income, expressed or implied, do not represent a guarantee.
  • helps traders of all levels learn how to trade the financial markets.
  • During this down move on Usd/Jpy, three spinning tops formed, followed by a sharp decline.
  • Japanese candlesticks with a long upper shadow, long lower shadow, and small real bodies are called spinning tops.
  • In order for the price to continue falling, more sellers are needed but sellers are all tapped out!

A spinning top candle generates potential reversal trade ideas line hanging man, doji, hammer, candle formations. We recommend waiting till the next few candles to finish formation before making any trade decision. Another example would be using the spinning top to manage your trades. An example of this could be if you were in a long trade and after a strong move higher price forms a spinning top. This could be your clue to either start trailing your stops into profit or moving your stop into breakeven in case price makes a quick reversal.

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