Spinning Top

DEFINITION of 'Spinning Top'

A type of candlestick formation where the real body is small despite a wide range of price movement throughout the trading day. This candle is often regarded as neutral and used to signal indecision about the future direction of the underlying asset.

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BREAKING DOWN 'Spinning Top'

If a spinning top formation is found after a prolonged uptrend, it suggests that the bulls are losing interest in the stock and that a reversal may be in the cards. On the other hand, if this formation is found in an defined downtrend, it suggests that the sellers are losing conviction and that a bottom may be forming.

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RELATED FAQS
  1. How are Spinning Top patterns interpreted by analysts and traders?

    The spinning top candlestick pattern is usually interpreted by traders and market analysts as neutral or indicative of possible ... Read Full Answer >>
  2. How do I implement a forex strategy when spotting a Spinning Top Pattern?

    The spinning top candlestick is commonly interpreted by analysts as a signal of market indecision. A spinning top is formed ... Read Full Answer >>
  3. How effective is creating trade entries after spotting a Spinning Top pattern?

    Although a spinning top candlestick pattern can sometimes signal an impending market reversal, it is commonly interpreted ... Read Full Answer >>
  4. How do I build a profitable strategy when spotting a Spinning Top pattern?

    The spinning top candlestick pattern can best be used to create a profitable trading strategy when it occurs after a steeply ... Read Full Answer >>
  5. What is Fibonacci retracement, and where do the ratios that are used come from?

    Fibonacci retracement is a very popular tool among technical traders and is based on the key numbers identified by mathematician ... Read Full Answer >>
  6. What are some of the most common technical indicators that back up Doji patterns?

    The doji candlestick is important enough that Steve Nison devotes an entire chapter to it in his definitive work on candlestick ... Read Full Answer >>
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