Glossary Term

Spinning Top

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A spinning top is a type of candlestick shape used by chartists in order to signal indecision in a market. Technically these patterns appear when bulls and bears are battling it out but there’s no clear winner. In other words, spinning tops represent buyers and sellers that are almost equally matched. Sellers push the price down, buyers pull it back up, so the price range of the candle is large but it basically opens and closes at similar levels. On the chart this appears as a candle with both a long upper and a long lower wick, and a small body that is found approximately in the middle of the two. Much like other candlestick shapes and patterns, on its own the spinning top doesn’t tell you much, it must be confirmed by the price action that follows it. For instance, at the top of an uptrend a spinning top can signal that sellers are stepping back into the market. At the bottom of a downtrend it can mean the opposite, that buyers are returning to the fray. What happens after a spinning top is what will tell you whether a trend is about to reverse or whether it was a false signal.

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