- Sentiment: Neutral
- No. of candles: 1
- Direction: Neutral
What Is The Spinning Top Pattern?
The Spinning Top pattern is a neutral Japanese candlestick pattern that consists of a single candle.
The candle consists of a small real body, indicating that the opening and closing prices are close to each other, with upper and lower wicks of equal length, indicating that both buyers and sellers are actively participating in the market.
What Is The Psychology Behind The Spinning Top Pattern?
The Spinning Top pattern reflects a period of equilibrium between buyers and sellers, with neither party able to gain control.
The small real body of the candle indicates that the opening and closing prices are close to each other, suggesting that the market is in a state of balance.
The equal length of the upper and lower wicks indicates that both buyers and sellers are active in the market and are struggling for control.
How To Trade The Spinning Top Pattern?
Trading the Spinning Top pattern can be challenging since it is a neutral pattern, and it is difficult to predict which way the price will move next.
Traders can use other technical indicators and chart patterns to confirm the direction of the trend before entering a trade. Some traders use the high and low of the Spinning Top candle as potential buy or sell triggers, placing a stop loss order above or below the high or low, respectively.
However, it is essential to be aware of the overall market context and to consider factors such as support and resistance levels, as well as the strength of the prevailing trend.
The Spinning Top pattern can provide valuable information about market equilibrium between buyers and sellers, but it is crucial to use it in conjunction with other technical indicators and chart patterns to confirm the trend change or continuation.
Keep in mind that a single Spinning Top candle does not necessarily indicate a significant change in market sentiment, and it is always necessary to use proper risk management techniques to protect against potential losses.