[ad_1]
Black Spinning Top Candle Pattern
A black spinning top is a small candle with tall shadows. Candle theory says that it acts as with indecision. Testing reveals that it is a reversal 51% of the time. Thus, theory and reality agree. If you can call it good news, the black spinning top ranks 1 for frequency. That means it appears as often as weeds in a vacant lot. Performance ranks 73rd, or near the other end of the scale. The bottom line on this candle is it does not amount to much of anything.
Black Spinning Top Candlestick: Important Results
Theoretical performance: Indecision Tested performance: Reversal 51% of the time Frequency rank: 1 Overall performance rank: 73 Best percentage meeting price target: 83% (bull market, up breakout) Best average move in 10 days: -3.36% (bear market, down breakout) Best 10-day performance rank: 58 (bull market, up breakout) All ranks are out of 103 candlestick patterns with the top performer ranking 1. “Best” means the highest rated of the four combinations of bull/bear market, up/down breakouts. The above numbers are based on hundreds of perfect trades. See the glossary for definitions. |  Black Spinning Top |
Black Spinning Top Candlestick: Discussion
As I mentioned in the introduction, the black spinning top works in theory as it does in reality: indecision. Price breaks out in any direction almost equally. With a frequency rank of 1, the candle is prolific, so you will see it often in a historical price series. The best move 10 days after a breakout occurs when price drops 3.36% in a bear market. However, the best performance rank is 58 after an upward breakout in a bull market. The difference between the downward move in a bear market and the best performing rank coming after an upward breakout in a bull market, is one of degree. The first is just the best average move that the black spinning top achieved. The rank is a comparison with other candle patterns.
If you want a few bones from my Encyclopedia of candlestick charts book, here are three to chew on. The pages refer to the book where the tips appear.
Black Spinning Top Candlestick: Identification Guidelines
| Characteristic | Discussion |
| Number of candle lines | One. |
| Price trend leading to the pattern | None required. |
| Configuration | Look for a small black body with shadows taller than the body. |
Black Spinning Top Candlestick: Three Trading Tidbits
- Black spinning top candles that appear within a third of the yearly low perform best — page 696.
- Black spinning top candles with shadows taller than the median outperform those shorter than the median — page 697-698.
- Volume gives performance clues — page 698.
Black Spinning Top Candlestick: Example
Candle B is a white spinning top that appears in an upward price trend. Notice the small white body and tall upper and lower shadows. Price breaks out upward from this spinning top two days later, meaning the spinner acted as a continuation of the up trend.
Candles C, D, and E are also black spinning tops. Candles C and E act as continuations of the downward price trend whereas candle D is a reversal. Price enters and exits the candle from the top.
–
[ad_2]
