Japanese spinning candles.

Another type of candle that you can often notice on technical analysis charts, this candle got its unique name because of its similarity to a top.

Spinning tops have a relatively short body and two shadows equal and longer than the body itself.

In their appearance, they exactly resemble the top we know from childhood; thanks to their structural features, they are clearly visible on the graphs.

The shape of the candle indicates a slowdown in price movement since the rate remained virtually unchanged between the opening price and the closing price, despite some fluctuations during their formation.

The appearance of Spinning Tops should alert the trader, since they are sometimes the harbingers of a trend reversal or the onset of a correction. Quite often you can find similar Japanese candles during a horizontal price movement ( flat ).

That is, if at this moment you have open transactions, you should prepare for their completion, but if, on the contrary, you are going to open a new position, it is better to wait for further developments.

The example below clearly shows what happens after the spinning top candle appears on the chart of a currency pair.

It is clear that there are exceptions to any rule, so we use the reversal indicator .