Spinning Top
A spinning top is a candlestick pattern that indicates indecision in the market. This pattern occurs when the open and close prices of an asset are very close to each other, creating a small body with long upper and lower shadows. The presence of a spinning top suggests that neither buyers nor sellers are in control, resulting in a standoff between the two forces.
Interpretation
Traders often interpret a spinning top as a signal of potential trend reversal or continuation. If a spinning top forms after a strong uptrend or downtrend, it may indicate a potential reversal in the trend. However, if it forms in the middle of a trend, it may suggest a continuation of the current trend. Traders typically look for confirmation from other technical indicators to make decisions based on the spinning top pattern.
Key Takeaways
Spinning tops are candlestick patterns that indicate market indecision and a standoff between buyers and sellers.
Interpretation of the spinning top pattern depends on its position in a trend, with potential signals of trend reversal or continuation.
Traders often look for confirmation from other technical indicators before making trading decisions based on spinning top patterns.
