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

Reversal Spinning Tops Candle-stick Pattern Setups

Spinning tops candlesticks pattern setup have a small body with long upper and lower shadows. These spinning top are referred to by this name of spinning tops because they are similar to a spinning tops on a matchstick.

The upper and lower shadows of the spinning tops are longer than the body. The example illustrated below shows the spinning top pattern. You can look for the pattern setup in your Meta Trader 4 Stock Indices Platform charts. The example illustrated below shows a screenshot to help traders when it comes to learning and understanding these formations.

How to read candlestick charts - Spinning Tops

Color of the spinning top candle is not very important, this formation show the indecision between the buyers and sellers in the trading market. When these chart setups appear at the top of a stock trend or at the bottom of the trend it may signal that the trend is coming to an end & it may soon reverse & start going the other direction. However, it is best to wait for confirmation trading signals that the direction of a stock trend has reversed before trading the trading signal from this chart formation.

Candlestick Reversal Patterns Formations on Trading Charts

At the top of an upward stock trend a black/red spinning tops shows that a reversal is more likely than when color of the candle is white/blue.

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

This reversal stock signal is confirmed when the next candlestick pattern that forms after the spinning tops closes below the neckline for a downward stock trend reversal signal confirmation, and closes above the neckline for a reversal stock signal in a down-wards trend.

The neckline is:

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

Below is an example of this Japanese charting techniques where this pattern has formed and how to trade it. On the trading chart below when the price moved above the neckline the reversal stock signal given by the spinning top candlestick was confirmed and this was a good point to exit the short sell stock trade transaction.

Spinning Tops Pattern on a Chart

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

Doji Candles Pattern

This is a pattern with the same opening & closing price. There are various types of doji candlestick patterns that form on charts.

following examples explain various setups of the doji candlestick:

Long-legged doji candlestick has long upper & lower shadows with opening and closing price at the middle. When the Long legged doji pops up on a chart it shows indecision between stock traders, the buyer and the sellers.

Below is an example image image of the Long Legged

• Doji chart pattern

Cross Doji Indices Trading Candle-stick

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

This stock pattern pops up at market turning points & warns of a possible trend reversal in the Stock Indices. Shown Below is as example of this chart formation

• Cross Doji Pattern

Inverted Cross Doji Candle-stick Pattern

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

This reversal stock pattern pops up at market turning points & warns of a possible trend reversal in the Stock Indices. Shown Below is an example

• Inverted Cross doji

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