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Identifying crucial candlestick patterns can surely be a game-changer in your trading career. One such pattern name spinning top holds one of the most profitable and significant places in the list of candlestick patterns. In this article, we’ll dive into the essence of the spinning top candlestick pattern, its interpretation and how it can be used on the Pocket Option trading platform.
What is the Spinning top candlestick pattern?
A spinning top candlestick pattern is characterized by a short real body and long shadow. This candlestick pattern represents an indecision between buyers and sellers. You can easily identify this pattern with a small body and a long shadow. The appearance of this pattern indicates a particular trading session where there is an indecision among traders which means neither buyers nor sellers could gain the upper hand.
Significance of Spinning Top Pattern
As I said above, the appearance of a spinning top candlestick pattern is a signal of a potential trend reversal or continuation of the same, depending on the context it appears in. When the spinning top pattern appears after a significant downtrend or uptrend, it suggests that the current trend is losing momentum and may soon reverse. conversely, If found in a range-bound market, it indicates that an ongoing trend is likely to continue.
Trading strategies with spinning top on Pocket option
Trend reversal: When a spinning top candlestick pattern appears after a big trend it signals a trend weakening.
Entry and exit points: This candlestick pattern can help identify potential entry and exit points. For example, a spinning top candle followed by a bullish candle after a down trend could be a signal for entry similarly spinning top candlestick followed by a bearish candle after a bullish trend could be a signal for exit.
Example
Given above is the live chart of AUD/USD and as you can see a spinning top candlestick pattern appears after a good uptrend so, yes you can use this opportunity to place a sell trade.
Similarly, As you can see above in the live chart of AUD/USD a spinning top candlestick pattern appears following a bearish candle. It signals a continuation of a bearish trend so, you can use this opportunity to place a down trade or continue with your previous trades.
