• Spinning tops

The Spinning Tops have longer shadow than the real body. The colors of the real bodies are not very important. The pattern indicates the indecision between the bullish and bearish trends. While one long shadow is a sign of the reversal, the situation when both shadows are long indicates participants' hesitation.

Small Body Size, despite its color, describes that the price has moved slightly from the open price to the close one. Long shadows show an extreme activity of both buyers and sellers through the session. Prices fluctuation has been considerable within the period despite open and close are not far from each other.

A Spinning Top following the long uptrend may be the sign of the bulls' weakness and possible inversion or interruption of the trend. In contrast, a spinning top appearing after a long black candlestick, or decline, may show the bears' weakness and forecast possible trend inversion or interruption as well.

• Marubozu

White Marubozu: Is a long white body with no shadows on either end. This is an extremely strong pattern. Consider how it is formed. It opens on the low and immediately heads up. It continues upward until it closes, on its high.

Counter to the Black Marubozu, it is often the first part of a bullish continuation pattern or bearish reversal pattern. It is called a Major Yang or Marubozu of Yang.

Black Marubozu: Is a long black body with no shadows at either end is known as a Black Marubozu. It is considered a weak indicator. It is often identified in a bearish continuation or bullish reversal pattern, especially if it occurs during a downtrend.

A long black candle could represent the final sell off, making it an "alert" to a bullish reversal setting up. The Japanese often call it the Major Yin or Marubozu of Yin.

Closing Marubozu: Has no shadow at its closing end. A white body will not have a shadow at the top. A black body will not have a shadow at the bottom. In both cases, these are strong signals corresponding to the direction that they each represent.

Opening Marubozu: Has no shadows extending from the open price end of the body. A white body would not have a shadow at the bottom end; the black candle would not have a shadow at its top end. Though these are strong signals, they are not as strong as the Closing Marubozu.

• Doji

Dojis are usually components of many candlestick patterns. This candlestick assumes more importance the longer the vertical line. The lengths of the shadows can vary. The longer the shadows are, the more significance the Doji becomes. More will be explained about the Doji in the next few pages.

Because dojis often have a body range (where the open price does not equal the close price), there will often be white or black doji bars. Color is not important in the formation of a doji bar. A black doji is no different than a white doji - in regards to the pattern type.
The second type of doji pattern is called the "doji cross" or "true doji". This is when the open price equals the close price.

The body of the Doji pattern is often support and resistance. I've found these to be a better indication of actual support/resistance than any other candlestick pattern. If you get multiple doji's in a row, try to average the body levels to find support and resistance.

Observe that investors should continually watch for Dojis and the parasol group of candles. These candle types will typically precede a major market reversal. In fact, many investors have told me these types of candles are some of the most important candle types for investors to use.

When a doji forms on your chart, pay special attention to the preceding candlesticks.

If a doji forms after a series of candlesticks with long hollow bodies (like white marubozus), the doji signals that the buyers are becoming exhausted and weakening. In order for price to continue rising, more buyers are needed but there aren’t anymore! Sellers are licking their chops and are looking to come in and drive the price back down. 

Keep in mind that even after a doji forms, this doesn’t mean to automatically short. Confirmation is still needed. Wait for a bearish candlestick to close below the long white candlestick’s open.

If a doji forms after a series of candlesticks with long filled bodies (like black marubozus), the doji signals that sellers are becoming exhausted and weakening. In order for price to continue falling, more sellers are needed but sellers are all tapped out! Buyers are foaming in the mouth for a chance to get in cheap.

While the decline is sputtering due to lack of new sellers, further buying strength is required to confirm any reversal. Look for a white candlestick to close above the long black candlestick’s open.