Spinning Tops

If long body reflects the strong condition of excess of demand or supply that occurs, then the information contained within a small body candlestick is a reflection its weak of excess of demand of supply that happen. The weakness of excess of demand of supply reflects situation of indecision or doubt in the market, where the holder of the long position is not so sure of the uptrend resumption and short position holders are also not sure of the downtrend resumption.

There are some candlestick formations formed by small bodied candlestick such as doji, hammer, hanging man, and spinning tops. For clarity, we will now discuss in advance with so-called spinning tops.

spinning tops are a candlestick formation that formed by a small / short body candlestick with a long upper and lower shadow.

The length of the upper and lower shadow, which joined with its short body in the spinning tops pattern reflects market conditions that are closed with the hesitancy after the previous session of trading, the market is colored with action of attraction between sellers and buyers. However, at the end of trading session, either the buyer or the seller there is no one that sure about what will happen in the next, so the price closed back at the level that almost the same as the opening price.
There are two kinds of spinning tops patterns known in candlestick analysis, namely white spinning tops pattern and black spinning tops pattern.
Due to the length of the body of candlestick in the spinning tops formation is very small then, in identifying the existence of spinning tops tops formation we will not pay much attention to the color of its constituent body, although on the other hand some books explain that white spinning tops will have a stronger bullish information than the black spinning tops, while the black spinning tops reflect bearish indication more stronger compared with white spinning tops.

Because of spinning tops reflect the market hesitancy with the direction of the trend that occur, then the bullish and bearish interpretations generated by a spinning tops formation will depend on the trend that preceded it. The emergence of a spinning tops formation that preceded by an uptrend is an indication of potential occur trend reversal to downtrend with his upper body as resistance.

Conversely, the emergence of a spinning tops that preceded by downtrend indicates the possibility of the occurrence of an uptrend with the tip of the lower body as a limitation support. Because of indication of uptrend or downtrend that generated by a spinning tops formation is strongly influenced by the direction of the trend that preceded it, then in the spinning tops analysis, you will also must perform trend analysis that preceded its emergence.