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Trading and Investment Terms

Marubozu

The marubozu candlestick pattern is formed by a single candle. 

In the Japanese language, the word Marubozu means "Bald Head" or "Shaved Head"

Deriving that, a perfect marubozu means a candle with no upper or lower shadow. 

It will only have a real body. 

A marubozu candle can be of two types 

  • The bullish marubozu 
  • The bearish marubozu.

Identification

  • Large actual body
  • There will be no shadow at either side of the candle.
  • The color of the candle has a very significant meaning.

Characteristics

There are three types of marubozu candles:

  • A Marubozu open
  • A Marubozu close
  • A Marubozu full

 

If the bullish marubozu appears in an uptrend it strongly implies a trend continuation. But while appearing in a downtrend, it indicates a trend reversal, that the market's sentiment has changed and the stock is now bullish.

 

If the bearish marubozu appears in a downtrend, it denotes a strong trend continuation. But appearing in an uptrend, it works as a trend reversal pattern, i.e, that the market's sentiment has changed and the stock is now bearish.