Spinning Tops

Spinning tops are a type of candlestick pattern that helps traders identify potential reversals in the market. The spinning top is a single-day formation consisting of an open, high, low, and close that are all near each other but not necessarily equal. These patterns represent indecision in which neither buyers nor sellers can gain control. Spinning tops have small real bodies and often have upper and lower shadows of approximately the same length. A spinning top could also be described as a candle with little or no real body and long wicks at both ends.

The interpretation of this formation is that neither buyers nor sellers could take control during the trading session, resulting in little or no change in price from the open to the close. This suggests that buying pressure has lessened and selling pressure has increased or vice versa. Spinning tops warn traders that the current trend may be coming to an end; if the current trend continues, then it will likely break out soon after a spinning top forms.

The key takeaway from this pattern is that it indicates an impending reversal of sorts when seen on a chart. When combined with other indicators like volume analysis, traders can better confirm whether a reversal is likely to occur after seeing a spinning top form on their charts. Furthermore, even though it's possible for this pattern to be caused by random market noise, when seen consistently for multiple days in succession it implies there's more underlying strength behind it than just mere noise alone.