Japanese Candlestick Charts and Spinning Tops

A candlestick chart is a style of bar-chart used primarily to describe price movements of a security, derivative, or currency over time.

It is a combination of a line-chart and a bar-chart, in that each bar represents the range of price movement over a given time interval. It is most often used in technical analysis of equity and currency price patterns. They appear superficially similar to box plots, but are unrelated.

Candlestick charts are thought to have been developed in the 18th century by Munehisa Homma, Japanese rice trader of financial instruments.^{[citation needed]}. They were introduced to the Western world by Steve Nison in his book, Japanese Candlestick Charting Techniques.^[1]

Spinning top is a Japanese candlesticks pattern with a short body found in the middle of two long wicks. A spinning top is indicative of a situation where neither the buyers nor the sellers have won for that time period, as the market has closed relatively unchanged from where it opened; the market is indecisive regarding its trend. The upper and lower long wicks, however, tell us that both the buyers and the sellers had the upper hand at some point during the time period the candle represents. When a spinning top forms after a run up or run down in the market, it can be an indication of a pending reversal, as the indecision in the market is representative of the buyers losing momentum when this occurs after an uptrend and the sellers losing momentum after a downtrend.