Spinning Top Candlestick Definition



 


        Spinning Top Candlestick - Definition

Friends, if you want to know and learn about Spinning Top Candle, then you are at the right place, read my post carefully and till the end.


What is a Spinning top candle :-

A spinning top is a candlestick pattern that has a short real body & upper and lower shadows may be big. It does not give entry and exit like Marbuzu Candle but it gives a lot of important information about the current market conditions, which makes it easier for the trader to take position in the market.


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Here we are showing you the screen shot of the Spinning Top candle, have a look and tell us what you see special in it.



1. The real body in these candles is very small.

2. The upper and lower shadows are almost equal or may be big.


What does a Spinning top tell you :-


In appearance, this candle is a very simple and small real body candle, but in reality, the signs of many events that happened during the day are hidden if we look at these events.


1. Small Real Body :- In this, the open price and close price are very close to each other. For example, the open price could be 110 and the close price could be 113, or the open price could be 110 and the close price could be 107. In both these situations it is common to become a small real body, so the change of 3 does not matter much.


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Because the open price and the close price are so close to each other, the color of the candle doesn't mean much. It does not matter whether the candle is green or red, it means that the open price and the close price are very close to each other.


2. Upper Shadow:- It connects the real body to the highest level of the day. If it is a red candle, the high and the open are aligned, and if it is a green candle, the high and the close are aligned. If you forget the lower shadow for a while, and focus only on the smaller real body and the upper shadow, what do you think will happen in the market?


The formation of the upper shadow indicates that the bulls in the market tried to take the market up, but they did not succeed in this effort. Had he been successful in this endeavor, the real candle would have been a long green candle, not a short one.


Spinning Top Candlestick - Definition


3. Lower Shadow:- Lower shadow connects the real body to the low point of the day i.e. the lowest price. If it is a red candle, then the low and close join together, and if it is a green candle, the low and the open combine. If you look at the real body and the lower shadow together and do not even pay attention to the upper shadow, then what will you see, what will happen in the market?


Just like it happened with the bulls, the presence of lower shadows is a sign that the bears tried their best to take control of the market and pull the market down but they were not successful in this effort. May it be If the bears were successful in their attempt, then the real body would have been very long and it would have been red in color and not a small candle, so it would be considered only an attempt by the bearers.


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Now if you explain or define its full summary, then looking at the three parts (upper shadow, body and lower shadow) of the entire body of the candle, it is known that the bulls made an attempt to move the market up which did not succeed. , Bears also tried to take the market down but they also could not succeed in this.


Both bullish players and bearish players i.e. Bulls and Bears tried to take possession of the market, but their efforts were not successful. This is what a small real body shows. That's why the Spinning Top is a candle indicating uncertainty and the market can go anywhere at any time, which means that any stock can dominate the bull and bear.


Now you must have understood what a Spinning Top is and why it is formed, now we will know what it means to become a Spinning Top in Bearish & Boolish condition.


When bearish is going on, the market is dominated by the bears. At the time of its formation, the bears may be preparing for a new round of selling. While the bulls try to stop the fall in the market, but these efforts of both of them are not successful.


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If their efforts were successful, it would have been a green or red long candle day and not a spinning. In such a situation, what will you decide considering the spinning top? Because as we told that spinning top means uncertainty, then what should you do?


In such a situation, when the picture is not clear, traders should be ready for positions on both sides, rather I would say that traders should not trade in such a way.


If you still want to take trade, then you can take it with some caution, I will tell you how :-


In such a situation, you should invest only half of your total capital at this time. Meaning if your intention was to buy 500 shares then you should buy only 250 shares at this time, and wait. It should be seen that what is the trend of the market and where does the market go, suppose that if the market really started going up then you would have got the stock at the lowest price.


But suppose the trader's decision was wrong and the stock price starts falling instead of rising, even then the trader will lose only half because he has bought only half the shares.


Here I will share you two charts, in which after the formation of spinning top, the stock goes up in one chart while it does not in the other.


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Spinning Top Chart 1: - Here you will see that even after many  Spinning Tops are formed, the stock has gone down continuously.  

(You can also see all these patterns yourself on Investing.com or on Moneycontrol.com)




Spinning Top Chart 2 :- Here you will see that the stock has not gone down even after the formation of many spinning tops, but its movement has changed which remained the same for a long time.




The gist of it is that a trader can make his trades after becoming Spinning Top but with caution.


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Here are some most important things to know : -


1. The hold of the Bulls / Bears has weakened, otherwise the Spinning Top would not have been formed.

2. Spinning top means that the bears/bulls have entered into the market, although they haven't succeeded yet.

3. Spinning Top indicates that – there is confusion in the market and both (the bulls and the bears) are not able to hold their full grip on the market.

4. Go with half position in the market don't invest full money.


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I hope, you have fully understood the meaning of Spinning Top and also understood that when and under what conditions it is made and what you have to do after its formation, please understand it well, I will end this chapter here and we will know more about the next candle stick in my upcoming post pls. note candlestick is the most important part of technical analysis ---- Thank You


By - www.marketkipathshala.in

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Spinning Top Candlestick - Definition

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