The Marubozu is one of the most powerful single-candle patterns in technical analysis. Its name comes from the Japanese word for "bald" or "shaved head," referring to its distinctive appearance with no wicks or shadows. When you see a Marubozu candle, it signals extreme conviction from either buyers or sellers. Let us explore how to identify and trade this pattern.
What is a Marubozu Candlestick?
A Marubozu is a candlestick with a long body and no upper or lower shadows (wicks). This means the opening price equals either the high or low of the session, and the closing price equals the opposite extreme. The candle represents complete dominance by one side of the market throughout the entire trading period.
Key Feature: A true Marubozu has no shadows at all. The open and close are at the absolute extremes of the price range for that period, showing total control by buyers or sellers.
Types of Marubozu Candles
Bullish Marubozu (White/Green)
A bullish Marubozu opens at the low of the session and closes at the high. The price only moved upward throughout the entire period, with buyers in complete control from open to close.
Bullish Marubozu Characteristics
- Open price equals the low price
- Close price equals the high price
- No upper or lower shadows
- Signals strong bullish momentum
- Often indicates continuation or reversal depending on context
Bearish Marubozu (Black/Red)
A bearish Marubozu opens at the high of the session and closes at the low. The price only moved downward, with sellers dominating from the opening bell to the close.
Bearish Marubozu Characteristics
- Open price equals the high price
- Close price equals the low price
- No upper or lower shadows
- Signals strong bearish momentum
- Indicates selling pressure and potential further downside
Variations: Opening and Closing Marubozu
In practice, perfect Marubozu candles are rare. Traders also recognize variations:
- Opening Marubozu: Has no shadow on the opening side but may have a small shadow on the closing side
- Closing Marubozu: Has no shadow on the closing side but may have a small shadow on the opening side
These variations still carry significant meaning, though slightly less powerful than a full Marubozu.
How to Trade the Marubozu Pattern
Strategy 1: Trend Continuation
When a Marubozu appears in the direction of the existing trend, it often signals that the trend will continue with strength.
Example: Bullish Continuation
Stock ABC is in an uptrend, trading at $50. A bullish Marubozu forms:
- Marubozu opens at $50 (the low)
- Marubozu closes at $54 (the high)
- Entry: Buy at $54.10 on the next candle open
- Stop loss: Below the Marubozu low at $49.50
- Target: $58 (equal to the Marubozu range projected up)
Strategy 2: Reversal Signal
A Marubozu can also signal a potential reversal when it appears after an extended move in the opposite direction.
Example: Bullish Reversal
Stock XYZ has been falling for weeks and reaches a support level. A bullish Marubozu forms:
- The stock has dropped from $80 to $50
- A bullish Marubozu appears at support, opening at $50 and closing at $55
- Entry: Buy at $55.20 after confirmation
- Stop loss: Below the Marubozu low and support at $49
- Target: $65 (previous resistance level)
Strategy 3: Breakout Confirmation
Marubozu candles are excellent confirmation signals for breakouts. When price breaks through a key level with a Marubozu, it adds credibility to the breakout.
Volume Analysis with Marubozu
The most reliable Marubozu patterns are accompanied by above-average volume. High volume confirms that the strong price movement was supported by significant participation, making the signal more trustworthy.
- High volume Marubozu: Strong signal, likely to see follow-through
- Low volume Marubozu: Weaker signal, may reverse quickly
Where Marubozu Works Best
Context matters when trading Marubozu patterns. They tend to be most effective:
- At key support and resistance levels
- After a period of consolidation
- At the start of a new trend
- Following significant news or earnings releases
- When aligned with the broader market direction
Common Mistakes When Trading Marubozu
- Chasing the candle: Do not buy at the very top of a bullish Marubozu without a pullback or confirmation
- Ignoring context: A Marubozu against the trend may be a trap rather than a reversal
- No stop loss: Even strong patterns fail; always protect your capital
- Trading small Marubozu: The pattern is most significant when the candle is larger than average
- Forgetting timeframe: Daily and weekly Marubozu candles are more significant than intraday ones
Marubozu on Different Timeframes
The significance of a Marubozu increases with the timeframe:
- Weekly Marubozu: Very powerful, often leads to extended moves lasting weeks
- Daily Marubozu: Strong signal for swing trades lasting days to weeks
- 4-hour Marubozu: Good for shorter swing trades
- 1-hour or less: Less reliable, best used with other confirmation
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Summary
The Marubozu candlestick represents pure momentum in one direction. Whether bullish or bearish, this pattern shows that one side completely dominated the trading session. Use Marubozu candles to confirm trends, identify reversals at key levels, and validate breakouts. Always consider volume and the broader context before trading this powerful pattern.
Continue learning about candlestick patterns with our guides on the spinning top pattern and pin bar strategy.