Spinning Tops Candlesticks Pattern and Dojis Candlestick Patterns - How Can Spinning Tops Candlesticks and Doji Patterns on Forex Charts Be Traded
Doji Consolidation Candlesticks Pattern and Doji Continuation Candlestick Patterns - Spinning Tops Candlestick Patterns - Spinning Tops Consolidation Candlesticks Pattern - Reversal Spinning Tops Candlestick Patterns
Spinning tops candlesticks pattern have a small body with long upper and lower shadows. These spinning tops are referred to by this name because they are similar to spinning tops on a matchstick.
The upper and lower shadows of the spinning tops are longer than the body. The example below shows the spinning tops pattern. You can look for the pattern in your MetaTrader 4 Platform charts. The example below shows a screenshot to help traders when it comes to learning and understanding these formations.
How to read candlestick charts - Spinning Tops
The color of the spinning tops candlestick is not very important, this formation show the indecision between the buyers and sellers in the Forex market. When these chart patterns appear at the top of a trend or at the bottom of the trend it might signify that the trend is coming to an end and it might soon reverse and start going the other direction. However, it is best to wait for confirmation signals that the direction of a currency has reversed before trading the signal from this chart formation.
Candlestick Reversal Patterns Formations on Trading Charts
At the top of an upward Forex trend a black/red spinning top shows that a reversal is more likely than when the color is white/blue.
At the bottom of a Forex 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 candlestick pattern that forms after the spinning tops closes below the neckline for a downward trend reversal signal confirmation, and closes above the neckline for a reversal signal in a downward trend.
The neckline is:
- For an Upward Forex Trend - The open of the previous candlestick that was plotted just before the spinning top.
- For a Downward Forex Trend - The open of the previous candlestick that was plotted 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 signal given by the spinning top candlestick was confirmed and this was a good point to exit the short sell trade.
Spinning Tops Pattern on a Chart
The color of the spinning tops formed is blue therefore meaning that a reversal was more likely as opposed to if the color had been red.
Doji Candlesticks Pattern
This is a pattern with the same opening and closing price. There are various types of doji patterns that form on charts.
The following examples show various patterns of the doji candlestick:
Long-legged doji candlestick has long upper and lower shadows with the opening and closing price at the middle. When the Long-legged doji appears on a Forex chart it indicates indecision between currency traders, the buyer and the sellers.
Below is an example screenshot image of the Long Legged
- Doji chart pattern
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 appears at market turning points and warns of a possible trend reversal in the Forex. Below is as example of this chart formation
- Cross Doji Pattern
Inverted Cross Doji
Inverted cross doji candlesticks have a long upper shadow and a short lower shadow and the open and close is the same.
This reversal pattern appears at market turning points and warns of a possible trend reversal in the Forex. Below is an example
- Inverted Cross doji
Technical Analysis - All doji candlesticks pattern show indecision in the foreign exchange 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 and at the close of the market the currency 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 and closing price.