Spinning Top

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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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INVESTOPEDIA EXPLAINS '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. How does a swing trader use the stochastic oscillator?

    The stochastic oscillator is a momentum technical indicator used to indicate points of possible price reversals. Swing traders ... Read Full Answer >>
  6. How can I spot trading opportunities looking at year-to-date (YTD) performance?

    Trading opportunities on the long side can be spotted by looking at stocks with the worst year-to-date (YTD) performance, ... Read Full Answer >>
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