How Can Spinning Tops Candlesticks and Doji Patterns on Stock Indices Charts Be Traded?
Spinning Tops Consolidation Indices Candles Pattern
Spinning tops candles pattern have a small body with long upper & lower shadows. These spinning top are referred to by this name of spinning top 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 explained and illustrated below shows the spinning top pattern. You can look for pattern on your MT4 Indices Trading Platform charts. The examples illustrated below shows a screen-shot to help traders when it comes to learning and understanding these formations.
How to read candle stock indices charts - Spinning Tops
Color of the spinning top candlestick is not very important, this formation show the indecision between the buyers and sellers in the stock indices trading market. When these stock indices patterns appear at the top of a indices trend or at the bottom of the indices trend it might signify that the indices trend is coming to an end and it may soon reverse & start going the other direction. However, it's best to wait for confirmation signals that the direction of a indices trend has reversed before trading the signal from this chart formation.
Candle Stick Reversal Patterns Formations on Trading Charts
At the top of an upwards indices trend a black/red spinning top shows that a reversal is more likely than when color of the candle is white/blue.
At the bottom of a Indices downward indices trend a white/blue spinning top shows that a reversal is more likely than when the color is black/red.
This reversal stock indices signal is confirmed when the next candlestick pattern that forms after the spinning tops closes below the neckline for a downward indices trend reversal stock indices signal confirmation, and closes above the neckline for a reversal stock indices signal in a downwards trend.
The neckline is:
- For an Upward Indices Trend - The open of the previous candle that was drawn just before the spinning top.
- For a Downwards Indices Trend - The open of the previous candle that was drawn just before the spinning top
Shown Below is example of this Japanese charting techniques where this pattern has formed and how to trade it. On the trading chart below when the stock indices trading price moved above the neckline the reversal stock indices signal given by the spinning top candlestick was confirmed and this was a good point to exit the short sell indices trade.
Spinning Top Pattern on a Chart
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 Candles Pattern
This is a pattern with same opening and closing indices price. There are various types of doji candle patterns that form on charts.
following examples show various patterns of the doji candle:
Long-legged doji candle has long upper and lower shadows with opening and closing stock indices trading price at the middle. When the Long-legged doji appears on a Indices chart it indicates indecision between stock indices traders, buyer & the sellers.
Shown Below is example image image of the Long Legged
- Doji stock indices chart pattern
Cross Doji Indices Trading Candle
Cross doji has a long lower shadow and a short upper shadow and the open & close of the day is the same.
This indices pattern pops up at market turning points & warns of a possible indices trend reversal in the Indices. Below is as example of this chart formation
- Cross Doji Pattern
Inverted Cross Doji Stock Indices Candlestick Pattern
Inverted cross doji candlesticks have a long upper shadow and a short lower shadow and the open & close is the same.
This reversal indices pattern pops up at market turning points & warns of a possible indices trend reversal in the Indices. Below is an example
- Inverted Cross doji
Technical Analysis in Indices Trading - All doji candles pattern show indecision in the stock indices trading 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 stock indices trading market the stock indices trading price closed unchanged at same stock indices trading price as the opening indices trading price. This doji shows that the overall stock indices trading 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 stock indices price & closing indices trading price.
