Price Action Trading

Marubozu
(Know Your Candlesticks)

Speaker: Manish Patel

This will be helpful to classify the Candlestick Patterns

[Complexity] + [Type] + [Pattern]

a. Simple + Reversal / Continuation + Pattern (Marubozu)

● Reversal signals are often stronger at significant price

levels (support, resistance, highs and lows).

● Higher Time Frame is more reliable and indicating much

higher possibilities of happening.
Marubozu Candlestick – meaning and interpretation

The Marubozu pattern is formed with a single, candle. According to traders, the
perfect Marubozu is a candle that has no shadows – upper or lower, unlike most
other candlestick patterns.

This candlestick pattern typically has, what is considered as a ‘real body’ and is
categorised into two types – the Bullish Marubozu Candle and the Bearish
Marubozu candle. These candlestick patterns strongly indicate a reversal or
continuation of a trend, depending on their appearance on the trading chart.
MARUBOZU CANDLE

● Marubozu is a Japanese word for Power/Rule.

● These are extremely powerful candles.
● They have a long body with small or no shadow.
● When a Green Marubozu candle is formed, it
means the assets opened at a certain level and
kept rising without falling down.
● Similarly, a Red Marubozu is formed when the
price opens at a certain point and keeps falling.
● Can be trend-reversal or trend-continuation
candle.
● A Marubozu with higher volume is more
powerful.
Trading with Bullish Marubozu

There are things you need to know about trading with Bullish Marubozu
candles. They are as under:

1. In a bullish Marubozu, the absence of upper and lower shadows indicates

that the low price is equal to the opening price, whereas the high price is
equivalent to the close price.

2. Bullish Marubozu candles appearing in an uptrend strongly indicate the

continuation of a trend. However, when they appear in a downtrend, it
implies a trend reversal. Such a situation signifies a change in the market’s
sentiment, indicating that the stock or asset traded is now bullish.

3. With the sharp sentiment change, traders expect to see a bullish surge,
anticipating it to continue over a few upcoming trading sessions. In this case,
traders should look for new buying opportunities after the bullish Marubozu
Trading with Bearish Marubozu

1. As is apparent from the term ‘bearish’, this Marubozu pattern indicates

extreme bearishness in the trading market. In this pattern, the high price of
an asset is equal to its opening prices, whereas the low price is equivalent to
the closing price.

2. The bearish Marubozu candle signifies the complete control of the sellers
on the market. Such is the level of the selling pressure that market
participants are willing to sell their assets at every possible price point in the
session. This causes the stock or asset’s price to close near its low point in
that particular session.

3. The appearance of the bearish Marubozu in a downtrend indicates the

continuation of a strong trend. However, if the candlestick appears in an
uptrend, it indicates a trend reversal, implying a change in the market’s
sentiment.

4. Traders, essentially expect that the sharp change in the market

sentiments will result in a surge of bearishness, which they expect will
continue for a few upcoming trading sessions. In such a situation, traders
should be on the lookout for selling opportunities after the bearish
Marubozu.
 Long Opening Long Close
H H H
H=C O=H O H=C
C O

Body > 95%

Wick < 5%
If, wicks or
shadow
presents

O C=L
O=L C=L O/L C/L
L

More Powerful Little Less Powerful Pattern

Pattern
 H H
C O

O C
L L

Sellers Buyer
available available
SL
SL
 SL
If, trade goes
against your
analysis