What is Black Spinning top Candlestick
Black spinning top is a type of candlestick , where the open and close are very close to each other and we have upper and lower shadow. They have small body with almost equal shadows.
Underlying Psychology of Black Spinning Top
This means that, there were many market participants buying and selling the underlying stock at any price during the session and due to this continuous buying/selling price couldn’t move in any direction and closed just below the open price.Just like white spinning tops,black spinning top too represent the indecision in market where bears have slight upper hand.
Example of How to Use Black Spinning Top
How to Trade Black Spinning Top Candlesticks
Decision: Since black spinning top are neutral,traders should wait for market direction. If price breaks decisively upward,they should buy and if price breaks downward,they should start looking for selling opportunities.
Stop loss: If its a buy then low of candle will act as stop-loss. In case of sell , high of candle will act as stop-loss.
Main Points to Consider
- If black spinning top appears after a uptrend,at resistance or after a long white Maburozu candle, it potentially act bearish candle.
- If white spinning appears after a downtrend,at support or after a long black Maburozu candle, it potentially act as bullish candle.