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What Is a Spinning Top Candlestick?

A short real body that is vertically centered usually between long upper and lower shadows used to be known as the Spinning Top Candlestick pattern. Overall with the help of Candlestick, we are able to calculate the future direction of the asset. It means that neither buyers nor sellers could gain the upper hand.
When buyers are used to pushing the price up during a given period of time and sellers are used to pushing the price down during the same period of time that's when a Candlestick pattern is used to form usually, but ultimately the closing price ends up very close to the open. After a strong price advance or decline, spinning tops are used to show a potential price reversal signal if the candle following is used to be confirmed. 

When Does It Matter?

Now, it's very interesting that after prices go up or down a lot spinning tops are used to become important. It's like a board of warning that is telling you that the price might change its direction, but you should not jump to a conclusion just yet. 

Confirmation is Key

To be sure that what is happening, we usually need to look at the next candlestick and keep little candle shapes on the chart in mind for accuracy. If the next one supports what the spinning top candlestick pattern has suggested. By any chance if it doesn't then most likely we have to wait for another signal. 

Spinning Tops and Bullish Spinning Top Candlestick Pattern

Sometimes, a spinning top candlestick is used to tell us that a big trend might be changing. If a spinning top candlestick pattern shows up after prices have been going up for a while, then most likely it's possible that the upward trend is slowly going down. Similarly, if it appears after a downtrend, then it could signal that the downtrend is losing strength that candlestick is known as a bullish spinning top candlestick pattern.

Using Spinning Tops Wisely

Spinning top candlesticks are useful, but when we use them with other tools and tricks then it is used to work best in trading. Tools like indicators or looking at the support and resistance levels is used to help us in enhancing our decision-making.

Examples and Warnings

In the example, you will be able to see a spinning top candlestick pattern on a chart. Then you are supposed to pay attention to what happens because it's all about confirmation. If the next candlestick goes along with what the spinning top suggests, it's like a green light. But if it doesn't, then you are supposed to be cautious.

Limits of Spinning Tops

Now you should keep in mind that not every spinning top candlestick means that something big will eventually happen. Sometimes it is used to show up when price is used to go sideways only which is not interesting for traders at all. And even when it is used to suggest a chance there is not used to be a guarantee.

Stay Safe with Your Trades

Lastly, trading based solely on spinning tops can be risky. These patterns can have big ups and downs, so be careful with your stop-loss orders (those are like safety nets for your trades). Also, spinning tops don't tell us where to take our profits or when to get out of a trade, so use other strategies and tools for that.

Lastly, trading based solely on the spinning top candlestick can be very risky. These patterns can have big ups and downs too so you should be very careful with your stop-loss order otherwise your traders will end up losing their money and the bullish spinning top candlestick pattern doesn't tell us when you are supposed to take out your profits or when to get out of trade, so you should have other strategies up in your slieves.

Conclusion

The information provided in this blog is for educational purposes only and should not be considered financial or investment advice. Trading in stocks and securities involves risks, and individuals should carefully evaluate their financial situation and consult with professionals before making any trading decisions, you can take the help of FinTrades advisory service which will increase your chances of earning profit and if you are interested in trading then you should join the FinTrades telegram channel for your better financial future. And if you are a potential trader who wants to learn how you are supposed to trade then we are glad to know that we have launched our own trading course click here and start your profitable journey as soon as possible.