The Marubozu candlestick pattern, meaning “bald” in Japanese, is a single candlestick formation that reflects decisive market sentiment. Its unique characteristic is the absence of upper and lower shadows, making it appear “bald” or shadowless. This pattern signifies strong momentum, either bullish or bearish, depending on its color.
Types
- Bullish Marubozu: This pattern appears as a solid green (or white) candlestick with no shadows, indicating that buyers dominated the session from open to close. It suggests strong buying interest and often indicates the potential for continued upward momentum.
- Bearish Marubozu: This is a solid red (or black) candlestick with no shadows, reflecting intense selling pressure. It indicates that sellers were in control throughout the session, signaling potential for further downside.
Key Rules of Candlestick Analysis
Before analyzing the Marubozu, remember these three fundamental rules:
- Buy strength and sell weakness.
- Be flexible with patterns; verify and quantify them.
- Look for the prior trend.
Interestingly, the Marubozu pattern breaks the third rule. It can appear anywhere on the chart—at the beginning, middle, or end of a trend—and still holds the same significance, offering a standalone indication of market strength or weakness.
Trading Implications
The Marubozu candlestick is a clear signal of market sentiment. When it appears, it suggests a continuation of momentum in the indicated direction. While the textbook definition excludes any shadows, minor deviations are acceptable without altering its interpretation.
Understanding and utilizing the Marubozu pattern equips traders to act decisively in trending markets, making it an essential tool for technical analysis.
