Marubozu Candlestick Pattern

Marubozu Candlestick Pattern

Nov 29 • Forex Trading Articles, Forex Trading Strategies • 356 Views • Comments Off on Marubozu Candlestick Pattern

The Marubuzo is a one-candle pattern. It indicates the direction of a trend. The word “Marubozu” means “baldhead in Japanese.” The candlestick pattern gets its name from the fact that it has no wicks. 

What is the Marubozu candlestick pattern?

  • When a Marubozu is present, the price opens at the high and closes at the low. The Marubozu candlestick pattern comprises a long signal candle with no extensions. Another characteristic of this pattern is that it can appear anywhere on the chart.

    Therefore, traders can quickly identify the Marubozu on the chart. However, when the traders are looking for it, they should keep the following criteria in mind:
  • – Marubozu is two times bigger than a regular candle. But, of course, it can also be more significant than that. 
  • – There are no upper and lower wicks in a Marubozu candlestick pattern.

The structure of this type of candlestick involves no wicks, but it is still pretty hard to find a large candle with no wicks. So, we can consider a big candle with a little wick as a Marubozu.

Types of Marubozu

There are three types of Marubozu:

  1. 1 – Pattern with no wick, which is called the Marubozu full
  2. 2 – The pattern with a bullish upper wick and a bearish lower wick, which is called the Marubozu open
  3.  3 – And finally the pattern with a bullish lower wick and bullish upper wick, which is called the Marubozu close.

An important note to include is that there cannot be wicks at both ends. One end of the candlestick will always remain flat. One more thing to remember for traders is that the longer the candle is, the higher its effectiveness will be.

There is a bit of a similarity between the engulfing pattern and the Marubozu. But the Marubozu does not always engulf the following candles. 

How to use the Marubozu candlestick pattern in a strategy?

The Marubozu comes in two variations; the bullish and the bearish. If we talk about the bullish version, the Marubozu emerges in an uptrend.

While in the bearish variation, the Marubozu appears in a downtrend. Traders can take advantage of Marubozu because the candlestick pattern tells the reversal of a trend and the continuation of a trend.

When the Marubozu appears after the breakout, there are strong chances of a trend continuation to happen. The candle next to Marubozu can confirm how persistent the trend is.

If the candle next to the Marubozu is not bullish or bearish, traders should avoid entering the trade. If a trader finds the Marubozu in an uptrend, but the candle next to the pattern is not bullish, it is a possibility that the trend will not continue forward.

This kind of candlestick pattern can also detect a reversal in the trend. When the design appears near the support and resistance levels, it shows a price reversal. It is a common thing for the traders to take positions after the appearance of Marubozu. 

Bottom line

The Marubozu is a simple candlestick pattern that can be easily identified on a chart. Traders should confirm Marubozu’s signals by combining them with other indicators.

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