How Can Spinning Tops Candle-sticks and Doji Patterns on Stock Indices Charts Be Traded?

Spinning Tops Consolidation Indices Candlesticks Pattern

Spinning tops candles pattern have small body with a long upper & lower shadows. These spinning tops are referred to by this term of spinning top because they are similar to spinning tops on a match-stick.

The upper & lower shadows of the spinning top are longer than the body. The illustration explained and illustrated below illustrates the spinning top pattern. You can look for pattern setup on your MT4 Platform Software charts. The examples shown below shows a screen shot to help the traders when it comes to learning and understanding these formations.

How to read candle charts - Spinning Tops

Color of the spinning top candle isn't very important, this formation show the indecision between the buyers(bulls) & sellers(bears) in the market. When these indices setups appear at the top of a market trend or at the bottom of the trend it may signify that the trend is coming to an end and it may soon reverse & start going the other direction. However, it is best to wait for confirmation signal that direction of a has reversed before taking the signal from the chart setup formation.

Candle Reversal Patterns Formations on Charts

At the top of an upward trend a black/red spinning top illustrates that a reversal is more likely than when colour of the candlestick is white/blue.

At the bottom of a Indices downward trend a white/blue spinning top shows that a reversal is more likely than when the color is black/red.

This reversal signal is confirmed when the next candle setup that forms after the spinning tops candlestick closes below the neckline for a downward trend reversal confirmation, & closes above the neck-line for a reversal signal setup in a downward trend.

The neck-line is:

• For an Upward Indices Trend - The open of the previous candle that was drawn just before the spinning top.
• For a Downwards Trend - The open of the previous candlestick that was drawn just before the spinning top candlestick

Displayed Below is example of this Japanese charting techniques where this setup has formed and how to trade it. On the chart below when the price moved above the neck line the reversal signal given by the spinning top candle was confirmed and this was a good point to exit the short sell position.

Spinning Top Pattern on a Trade Chart

Colour of the spinning tops formed is blue therefore meaning that a reversal was much more likely as opposed to if the color had been red.

Doji Candlesticks Pattern

This is a pattern with same opening & closing price. There are various types of doji candle stick set-ups that form on charts.

following examples show various patterns of the doji candle:

Long-legged doji candle has long upper & lower shadows with opening & closing price at the mid. When Long legged doji appears on Indices chart it illustrates indecision between the stock traders, buyer & the sellers(bears).

Displayed Below is illustration image of the Long Legged

• Doji pattern

Cross Doji Indices Trade Candle

Cross doji has a long lower shadow and a short upper shadow and the open and close of the day is the same.

This pattern setup pops up at market turning points and warns of a possible trend direction reversal in the Stock Indices. Below is an example of this chart setup formation

• Cross Doji Candlestick Pattern

Inverted Cross Doji Stock Indices Candle-stick Setup

Inverted cross doji candlesticks have a long upper shadow and a short lower shadow and the open & close is the same.

This reversal setup pops and shows up at market turning points and warns of a possible trend direction reversal in the Stock Indices. Below is an example

• Inverted Cross doji

Analysis in Indices Trade - All doji candlesticks pattern show the indecision in the market this is because at the top of the bulls were in control, at the bottom the sellers were in control but none of them could gain control and at the close of the market the price closed unchanged at same price as the opening price. This doji shows that the overall price movement for that day was 0 pips or just a min range of 1 to 3 pips. Reading these charts patterns require very small pip(point) movement between the opening price & closing price.

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