Spinning Top Candlestick

A spinning top is a candlestick pattern with a small real body positioned roughly mid‑way between long upper and lower shadows. The small body shows little difference between open and close, while the long wicks indicate significant price movement in both directions during the period. Together these features signal market indecision.

Key characteristics

• Small real body (close near open)
• Long upper and lower shadows
• Body can be bullish or bearish (color is secondary)
• Resembles a child’s spinning top — price moved but returned near the start

What it indicates

• Indecision: Both buyers and sellers pushed price, but neither maintained control.
• Potential reversal: When a spinning top appears after a strong uptrend or downtrend, it can signal trend exhaustion and a possible reversal — but only if followed by confirming price action.
• Continuation of range: Inside an established trading range, a spinning top often means the sideways action will continue.

Confirmation and context

A spinning top should not be traded in isolation. Confirmation comes from the next candle and from broader context:
* Bearish confirmation after an uptrend: a lower close or a strong bearish candle following the spinning top.
* Bullish confirmation after a downtrend: a higher close or a strong bullish candle next.
* If the next candle stays within the range, expect continued sideways movement.
Combine confirmation with technicals (support/resistance, MACD, RSI, moving averages) to improve reliability.

Example scenarios

• After an advance: a large spinning top followed immediately by a strong bearish candle can mark the start of a reversal.
• Inside a range: a spinning top that is followed by more sideways candles confirms ongoing indecision and range trading.
• During a decline: a spinning top may be a brief pause; a subsequent gap lower or strong bearish candle would indicate continuation rather than reversal.

Limitations

• Common pattern: Spinning tops occur frequently and often produce no meaningful move.
• False signals: Many will not lead to sustained reversals even with apparent confirmation.
• Risk sizing: The long shadows can make stop placement wide if using the high/low of the candle, increasing trade risk.
• No price targets: The pattern gives directional clues but not exit levels; use other tools for targets and trade management.

Trading guidelines

• Wait for confirmation from the next candle and from broader technical context.
• Use indicators and support/resistance to validate potential reversals.
• Manage risk with appropriate position sizing and stops — avoid overly wide stops that make the trade unprofitable.
• Prefer spinning top signals that occur at significant chart levels (tops, bottoms, trendlines) rather than in the middle of a trendless chart.
• Consider shorter‑timeframe confirmation for entry timing if trading on higher‑timeframe spinning tops.

Spinning top vs. doji

• Doji: almost no real body (open ≈ close) and typically smaller shadows—stronger sign of indecision in many cases.
• Spinning top: small but visible body with long upper and lower shadows. Both require confirmation and context to be actionable.

What is a candlestick?

A candlestick displays open, high, low, and close for a time period. The real body shows the difference between open and close; shadows (wicks) show the extremes of price movement.

Conclusion

A spinning top signals market indecision and can precede reversals after extended moves or signal continued sideways action inside ranges. Because the pattern is common and often ambiguous, traders should require confirmation, use additional technical analysis, and manage risk carefully before acting on spinning top signals.