Online Share Trading

Understanding the Marubozu candlestick Pattern

You will come across many types of technical charts during your online trading journey. These charts can be covered with different patterns and colours that help identify trading trends, such as bullish, bearish or uptrend. These charts and patterns are part of technical analysis. Candlestick patterns are very popular and traders who have been trading for a while know them well. This article will help you to understand the Marubozu candlestick design, one of the most well-known types. Continue reading.

Marubozu candlestick Meaning and Interpretation

The Marubozu pattern is derived from the Japanese term 'Marubozu,' which literally means 'bald'. It is made with one candle. The perfect Marubozu, traders say, is a candle without shadows, either upper or lower. This candlestick pattern is different from other ones. This candlestick pattern is often considered a'realbody'. It can be divided into two types: the bullish Marubozu candles and the bearish Marubozu candles. These candlestick patterns can be used to indicate a trend continuation or reversal depending on how they appear on the trading charts.

Trade with Bullish and Bearish Marubozu candlestick pattern patterns

It is based on the colour of the candlestick that reflects on the trading chart. This indicates that buyers or sellers have complete control over the market. The type of Marubozu candle also influences the trading style. It doesn't matter if it is a bullish or bearish Marubozu candle, it is important that you wait for a confirmation candle before entering into any trades. Let's take a closer look at bullish and bearish Marubozu.

Bullish Marubozu is a trading partner

You need to be aware of four things when trading with Bullish Marubozu candles. These are the following:

1. A bullish Marubozu is one in which there are no upper or lower shadows. This means that the low price is equal the opening price and the high price is equal the low price.

2. Bullish Marubozu is an indication of increased trading interest in an asset. This means that traders will buy it regardless of its current price. This causes the asset's value to close at its highest point during a session.

3. A bullish Marubozu candle in an uptrend indicates a continuation of a trend. If they are seen in a downtrend it indicates a trend reversal. This indicates that the sentiment of the market has changed and the asset or stock traded is bullish.

4. The sharp sentiment change has caused traders to expect a bullish surge and they anticipate it to continue in the coming trading sessions. Traders should seek out new buying opportunities following the bullish Marubozu.

Trade with Bearish Marubozu

You should be familiar with four things when trading with bearish Marubozu candles. These are the following:

1. This Marubozu pattern, which is also known as 'bearish' in the term, indicates extreme bearishness within the trading market. This pattern shows that the high price of an asset, or stock, is equal to its opening price, while the low price is equal to the closing price.

2. The market is under the control of sellers, as evidenced by the bearish Marubozu candle. Market participants will sell their assets or stocks at any price during the session because of this selling pressure. This causes the asset or stock to see a close match at its lowest point during that session.

3. A bearish Marubozu appearing in a downtrend is an indication of a continuation of a strong trend. If the candlestick is visible in an uptrend, however, it signifies a trend reversal and a change of sentiment.

4. Traders expect that the sudden change in market sentiments will lead to a surge in bearishness. This trend is expected to continue for several trading sessions. If this happens, traders need to be looking for selling opportunities.

Last note:

Marubozu candles are the easiest candles to find on trading charts because of their bright colours, bald shapes and lack of shadows. It is rare that traders will find the perfect Marubozu pattern on a market. This is why they tend to ignore minor differences between the opening and close prices of assets.

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