When it comes to trading, candlestick patterns are often used by traders to help them make trading decisions about when to enter or exit a trade. Candlestick patterns can give traders a good idea of where the market is heading and can also be used as an entry or exit signal.
A marubozu is a candlestick pattern characterized by having a long body with no wicks or very short wicks. The name "marubozu" comes from the Japanese word for "shaved head." A marubozu candlestick typically signals strong bullish or bearish momentum in the market.
What Are The Different Types of Marubozu Candlesticks?
There are three types of Marubozu candlesticks:
Full Marubozu
Marubozu Open
Marubozu Close
The length of the body is the most important factor when it comes to interpreting a marubozu candle.
A long body shows that there is strong buying or selling pressure in the market. A very short body, on the other hand, indicates that there is not much momentum behind the move.
In Full Marubozu, both the open and close will be the high or low (which means no wicks). The price opens and starts to rally in the opposite direction and closes at the extreme end.
In Marubozu open, open levels will not contain any wicks and swiftly rally on the opposite side. But compared to full marubozu, the closing price on the other side will have a slight wick.
In Marubozu close, open levels contain small wicks. They swiftly rally on the opposite side. But the closing price on the other side will not contain any wicks.
Bullish Marubozu Candlesticks
The above image shows three variations of bullish Marubozu patterns.
Bearish Marubozu Candlesticks
The above image shows three variations of bullish Marubozu patterns.
How to Trade Marubozu Candlestick Pattern?
Marubozu candles often occur at market turning points and can be used as a leading indicator of future price movements.
For example, a bullish marubozu candle at the bottom of a downtrend may signal that prices are about to reverse higher. Similarly, a bearish marubozu at the top of an uptrend indicates a fall in price.
Marubozu candlestick patterns are rare to occur in 'daily' and 'weekly' timeframes. However, they occur frequently in lower timeframes. Hence, they are highly beneficial for scalpers and intraday traders.
It is always better to integrate the marubozu candlestick patterns with a trading system or concept instead of using them as stand-alone concepts. Hence, it is always important to confirm marubozu candles with other technical indicators or support/resistance concepts before making any trading decisions.
Example - 1
The above image shows an example of a full bullish marubozu in the Nifty 5-min chart.
There is a clear resistance trend line, and the price broke the resistance trend line with a full bullish marubozu candle. So, breakout traders can plan a long trade above the marubozu candle, keeping a stop-loss below the marubozu candle.
Example - 2
The above image shows an example of a full bearish marubozu in the Adani Ent 15-minute chart.
There is a clear support line, and the price broke support with a full bearish marubozu candle. So, traders can plan a short trade below the marubozu candle, keeping a stop-loss above the marubozu candle.
Marubozu Candlestick Pattern Indicator
It is easy to identify the marubozu candlestick patterns in both Tradingview and Gocharting platforms.
Go to the indicator section and type 'Marubozu.' Both the charting platforms contain indicators to identify the marubozu candlestick patterns.
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