Spinning Top Candlestick - Identification and Trading

What is a Spinning Top?

A Spinning Top is a Japanese candlestick with a small real body and long upper and lower shadows. It shows market indecision – neither buyers nor sellers are in control. The open and close are close together, but price moved up and down significantly during the period.

How to Identify

• Small real body (less than 5-10% of total candle length)
• Long upper and lower shadows, roughly equal length
• Body color can be green or red, not crucial
• Appears at the end of a trend or in consolidation

How to Trade

The Spinning Top is not a strong buy or sell signal. It signals hesitation, so wait for the next candle to confirm. If it appears after an uptrend, a reversal may be coming. If after a downtrend, similarly.

Example: You see a Spinning Top after a series of strong green candles. Do not sell immediately; wait for the next candle. If the next candle is red (bearish), that confirms a sell.

Common Mistakes

• Confusing with Doji (no body). Spinning Top still has a small body.
• Trading immediately on the Spinning Top without confirmation.
• Ignoring the trend context.