What is a Marubozu candlestick?
Marubozu is a Japanese word that translates to “bold”.
In the form of a candle of Marubozu, without upper or lower shadow. The Marubozu candlestick has a large, long body and probably no shadow, making it difficult to miss. This strong body shows a powerful movement in either an upward or downward direction. When a bullish (green/white) Marubozu forms, it means that the price has been rising steadily from the time it opened until it closed, and is attempting to rise even higher.
Bullish Marubozu is a long green (or white) candlestick with no upper or lower shadow, but there may be some exceptions, such as a very small or negligible shadow on the side of the high or low.
This pattern shows that there was a bullish sentiment throughout the trading session which pushed the price higher and the stock closed near the day’s high.
Looking at Bullish Marubozu it is also understood that all the traders are in a very positive and bullish mood for this stock and they want to buy it at any price.
That is why the price of this stock is continuously going upwards and finally at the end of the day it closes at a high.
Here is the book meaning of the bullish marabozu candle
Open=Low
Close = High
But there may be some slight variation or change here.
One more thing is that it does not follow the previous pattern, that means if a day ago the sentiment of the stock was negative i.e. bearish candle but today it has become bullish marubozu, then it means that now the sentiment of this stock has changed to bullish.
Now that a good bullish pattern has formed in the stock, it is possible that it may continue for the next few trading sessions.
Now you will ask why this is so
Suppose the stock price kept rising throughout that day and there would be some traders who would not have been able to create positions that day, then this rise may continue in the next trading session also.
So overall, keep in mind that Maruboju is a continuation pattern that may continue further.
How do you take a trade on a Bullish Maruboju candle?
Like some day bullish marubozu candle is being formed then you can buy, now you will ask when to buy
So the answer is that you have to see that the open is equally low and does not go too low after making a high.
Meaning, if the stock is always moving around high (or 0.5% back and forth), then in this case you can take your trade from 3:15 to 3:25, just before the market closes.
But this trade is only for those who can take the risk.
If you want to get confirmation then buy it only on the green candle of the next day when it is confirmed that the bullish momentum is going to continue the next day also.
Now you buy at day high and place stoploss (SL) at low or open of marubozu.
Now here either you make an exit strategy in advance otherwise your trade can be completed by hitting the stoploss.
One thing to keep in mind here is that you should not take trades on the day when the marubozu candle is small, meaning the difference between high and low is less than 1%.
This is because in this condition the direction of the trade will not be known.
Watch below video
bullish marubozu Entry point
Bullish Marubozu Entry Point Once you confirm the pattern, consider entering a long position. You can either enter immediately upon the opening of the next bullish Marubozu candlestick or wait for a small retracement or pullback to provide a better entry price.
bullish marubozu Set stop-loss
Set a stop-loss level to protect your position if the trade goes against you. You can place the stop-loss below the low of the bullish Marubozu candlestick or based on other support levels.
bullish marubozu Set profit target
Identify profit targets based on your risk-reward ratio or technical analysis. You can use previous resistance levels, Fibonacci extensions or other price targets as potential exit points.
Monitor the trade closely and adjust your stop-loss and profit target levels as the price moves. As the price moves in your favor, consider following your stop-loss to lock in profits.
