What is the Marubozu Candlestick?
The Japanese term Marubozu means "Bald" in English.Marubozu is described as a candlestick without an upper or lower shadow. A Marubozu candlestick pattern is impossible to miss because of its huge, prolonged body and lack of shadows. This solid structure indicates a strong movement, either upward or downward.
A bullish (green/white) Marubozu indicates that from the moment the market started until it closed, there was an attempt to move the price higher.
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What is Marubozu Candlestick Pattern?
The Marubozu candlestick pattern, which consists of just one candle, symbolizes the market's determination to move mostly in one direction without a lot of resistance from the other side, forcing an end at the session's high or low.
The Marubozu candlestick pattern is a useful tool used by analysts to predict the future movement of the price of a certain company. Investors use the data to hold new positions or modify their current ones after examining the Marubozu candlestick pattern.
Bullish and Bearish Marubozu are the two subtypes of this currency.
Maintaining some trade rules:
- Buy strength and sell weakness
- Accept conventions with grace (check and quantify)
- Locate the earlier trend
Trade using Bullish and Bearish Marubozu Candlestick Patterns
Based on the colors of the candlesticks as they appear on the trading chart, either buyers or sellers are in total control of the stock market. Depending on the kind of Marubozu candle, the trading approach also varies.
Once again, it doesn't matter if the Marubozu is bullish or bearish; you must wait for a second confirmation candle before making a trade. Let's look more closely at the specifics of the bullish and bearish marubozu.
Bullish Marubozu Trading
You should be aware of these four aspects while trading with Bullish Marubozu candles. They are listed below:
- In a Bullish Marubozu, the starting price is identical to the low price, and vice versa when the upper and lower shadows are missing.
- Bullish Marubozu signals increasing purchasing interest in a certain asset among traders, to the point where traders are eager to purchase the asset during a session regardless of its price point. The asset's price, therefore, closes nearly at its session high.
- Bullish Marubozu candles that emerge during an upswing strongly suggest that a trend will persist. But when they do, it usually signals a change in the direction of the trend. In such a case, the market's mood has changed, signaling that the stock or other traded asset is now bullish.
- Traders anticipate a positive rise in response to the sudden shift in attitude and expect it to last for several forthcoming trading sessions. After the bullish Marubozu, traders should search for more buying chances.
Bearish Marubozu Trading
The same four concepts apply to trading with bearish Marubozu candles as they do with bullish candles. They are listed below:
- This Marubozu pattern denotes severe bearishness in the trading market, as is clear from the word "bearish." In this pattern, an asset's or stock's high price corresponds to its starting price, but its low price corresponds to its closing price.
- The bearish Marubozu candle symbolizes complete seller control of the market. Market players are willing to sell their stocks or other assets at any time throughout the session due to the degree of selling pressure. As a result, the price of the stock or asset finishes close to its low point for that specific session.
- A downturn is when the bearish Marubozu first shows, and it signals the continuation of the current strong trend. However, if the candlestick appears during an upswing, it signifies a trend reversal and signals a change in the market's mindset.
- In essence, traders anticipate that the sudden shift in market mood will lead to an increase in bearishness, which they anticipate will last for a few forthcoming trading sessions. Trading in such a scenario necessitates keeping an eye out for selling chances following the negative Marubozu.
Due to their distinctive brilliant colors, bald form, and absence of shadows, Marubozu candles are often the easiest candles to see on trading charts.
However, it is relatively uncommon for traders to see the ideal Marubozu candlestick pattern in a live market, which is why they frequently overlook little variations (less than 0.01%) between the opening and closing prices of assets, as well as the high/low price.
Frequently Asked Questions
A technical analysis pattern known as the Marubozu candlestick pattern indicates whether the market is strongly bullish or bearish. Indicating that the starting price and closing price of the period are either at the high (bullish Marubozu) or at the low (bearish Marubozu), it is distinguished by a candlestick with little or no shadow or wick.
Yes, Marubozu patterns can appear on several timescales, such as daily, weekly, or intraday charts.
Marubozu patterns can be interpreted by traders as signals to enter or leave transactions.
The Marubozu candlestick pattern has the benefit of being simple to recognize and trade as well as allowing investors to start a transaction at various moments. The requirement for a strong trend, as well as the scarcity of Marubozu candlestick formations, are drawbacks.
Avoid trading on candlesticks that are too long or too short since the stop loss would be severe and the investor would be subject to severe fines. To safeguard yourself from price drops, you can set a stop loss at any price below the current.
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