Spinning Top Candlestick: Meaning, Strategy, and Examples

These are stocks that we post daily in our Discord for our community members. Spinning tops may not mean anything on the day they form, but they signify a significant trend reversal. The third variation shows two consecutive bullish-colored spinning top pattern. Spinning tops can be spotted on a variety of chart time frames from minutes to monthly. The more useful chart time frames are the Daily, Weekly, or Monthly time frame as there is more data going into the candle’s creation. Trading Futures and Options on Futures involves a substantial risk of loss and is not suitable for all investors.

TRADING STOCKS IN THE BULLISH BEARS COMMUNITY

When the body is long, it indicates strong buying/selling pressure, while short bodies suggest indecision. Recognizing both helps traders anticipate shifts instead of reacting late. Market balance often flips when sequences of bullish turn into bearish. Intraday stats show Bullish Engulfing patterns achieve 55–65% win rates when volume aligns. Hammers work best in volatile markets but fail in sideways movement.

Traders see it as validation that the uptrend is resilient and that bearish attempts were quickly neutralized. It is considered especially effective when paired with high volume or strong momentum. LiberatedStockTrader’s backtesting reports ~56–58% success for Belt Hold patterns. TradingWolf places its effectiveness slightly higher, around 60–62%, particularly when appearing after prolonged selling.

Some traders use derivatives such as contracts for difference to act on these signals without owning the actual asset. This flexibility allows them to trade in both rising and falling markets. It reflects a session where buyers and sellers both pushed price aggressively, but neither side managed to win. It becomes a potential reversal signal only when it appears after a strong trend and is followed by a confirming candle in the opposite direction. A spinning top’s significance depends on where it appears in the trend.

• The second candlestick indicated by dotted lines is a spinning top due to its shorter real body and long upper and lower shadows.
• These bearish patterns are most effective when they form at resistance or after long rallies, ideally alongside declining momentum or RSI divergence.
• In Japanese candlestick literature, Marubozu literally means “shaven head,” a reference to its clean, shadowless appearance.

Spinning Top Candlestick Pattern FAQs

A single candle or group of candles shows buying strength taking over sellers. This pattern has been referenced in Japanese candlestick analysis as a symbol of bullish dominance. Western charting practices included it later as a continuation structure rather than a reversal signal. Traders interpret the pattern as either a reversal after a downtrend or a confirmation of an existing uptrend.

How to Trade the Marubozu Candlestick Pattern

The candle’s real body (the thick part between the open and close) represents the final settlement of that negotiation. A long body shows one side (bulls or bears) was decisively victorious. The wicks or shadows (the thin lines) represent the extreme demands or rejections that took place during the period. A long wick signals a massive rejection of that price level by the opposing force. Candlestick patterns are one of the most reliable visual tools for day traders. They simplify price movements, reveal emotions in the market, and help you time entries and exits with more confidence.

This means neither buyers nor sellers had a decisive advantage. Both tried to push the market in their favour, but by the end of the session, neither side truly won. A spinning top candle is a candlestick with a small real body positioned in the middle of two long shadows.

Bullish Candlestick Patterns That Every Trader Should Know

In the image above, you can see a spinning top chart pattern printed around the end of 2022. The chart follows the Nifty 50 Index, which consists of 50 of India’s largest companies. The candle has a small body, long wicks, and seeing as it is bearish, the opening price was higher than the closing price. Like the majority of stock chart patterns, the spinning top appears in one of two, mirrored ways – as either a bullish spinning top or a bearish spinning top. Let’s take a moment to explain these subtle differences and whether or not they offer any additional insight into future price action.

• The second important point when reading a spinning top candle chart pattern is position.
• Look at any pair on any time-frame, and you’ll see them everywhere.
• Dispelling these misconceptions helps traders use spinning tops more effectively without overreliance on the pattern alone.
• Because it shows consistent strength over three sessions, it is less prone to false signals than single-candle patterns.
• With both of these variations, context is king – always look at the subsequent candles and the prevailing price trend.

Ignoring the Broader Trend and Context

It is another common and effective candlestick reversal pattern used by traders to find trading opportunities and market trends. The timeframe plays a significant role in the reliability of the spinning top candlestick pattern. Higher timeframe spinning tops indicate more substantial market indecision and are more likely to precede significant trend reversals or consolidations. Bullish candlestick patterns are vital tools for traders seeking to identify trend reversals and continuation signals in financial markets. Bullish candlestick patterns visualize the battle between buyers and sellers, often marking critical turning points.

This is an example of spinning tops forming consolidation on a weekly chart of $META. Spinning tops can happen in uptrends, downtrends, and consolidation areas that form bull and bear flags. Tops are fundamental to forming these flag and pennant formations. In this case, a Spinning Top can indicate that the price is resting as it closes near where it opens (despite the wild price swings within the day that are reflected in the long wicks). Even better, you can choose to wait for the next candle or candles to present a potentially better entry, particularly if the price has normalized for the time being.

Are candlestick patterns enough for trading?

While the immediate response saw a slight pullback, the overall uptrend continued, demonstrating that not all spinning tops lead to reversals. This example underscores the importance of context and confirmation when interpreting spinning top signals. Tweezer top patterns are two-candlestick reversal patterns with coequal tops. This pattern can form at turning points in the market near support levels, signaling a Likewise, the bears lose control when the spinning top candlestick forms at the bottom of a bearish trend.

Sunder Subramaniam combines his extensive experience in fundamental analysis with a passion for financial markets. He possesses a profound understanding of market dynamics & excels in implementing sophisticated trading strategies. Sunder’s unique skill set extends to content editing, where he leverages his insights to develop equity analysis strategies at Strike.money. Arjun is a seasoned stock market content expert with over 7 years of experience in stock market, technical & fundamental analysis. Arjun is an active stock market investor with his in-depth stock market analysis knowledge.

What Is A Spinning Top Candlestick Pattern?

Stay alert during the trade by closely watching price action and be ready spinning top candlestick pattern to adjust your stop-loss or exit points as the market changes. Incorporating spinning tops into your strategy can really help in managing risk by spotlighting those moments when the market is hesitating. Confirmation from volume data or momentum indicators makes these signals pack a bit more punch. They tend to act as early heads-ups for potential trend reversals, especially when other indicators are singing the same tune.