Marubozu Candlestick Patterns: Bullish And Bearish Marubozu And Variations

The Marubozu candlestick pattern is one of the most important and frequently encountered signal candles on the forex chart. It is considered a candlestick pattern that indicates the upcoming market price trend. So, what exactly is the Marubozu candlestick pattern? What are the “secrets” to achieving success when trading with this candlestick pattern? Let’s explore with Finance Solutes in today’s article.

Let’s get started!!!

1. MARUBOZU CANDLESTICK PATTERN

The Marubozu candlestick is one of the continuation patterns, widely used by traders thanks to its strong and reliable signals.

The Marubozu candle is considered one of the most important signal candlesticks. You can encounter it quite frequently on Japanese candlestick charts.

1.1. What is a Marubozu Candle?

The Marubozu candlestick pattern, also known as the “strong force candle,” represents the overwhelming strength of either the buyers (bullish) or the sellers (bearish) during the trading session that forms the Marubozu.

You might not know that “Marubozu” in Japanese means “bald,” simply because this candlestick has no wicks or shadows. This means the highest or lowest price is the same as the opening or closing price during the session.

This candle can appear at any point during a strong uptrend or downtrend, indicating the continuation of the trend. It can also appear at the end of a distribution/accumulation phase, signaling the market is transitioning into a new trend.

This candlestick pattern is commonly applied across many financial markets influenced by supply and demand forces such as Forex, stocks, cryptocurrencies, commodities, and more.

1.2. Characteristics of the Marubozu Candlestick Pattern

The Marubozu pattern is a single-candle pattern, consisting of just one candle with the following characteristics:

• The candlestick body is very long—typically, when a Marubozu appears, its body is at least longer than the previous 5 candles.
• It has no wick (shadow); if there is one, it will be very short.
• A Bullish Marubozu has the highest price equal to the closing price and the lowest price equal to the opening price. Conversely, a Bearish Marubozu has the highest price equal to the opening price and the lowest price equal to the closing price.

1.3. Meaning of the Marubozu Candlestick Pattern

The Marubozu candlestick is divided into two basic types: Bullish Marubozu and Bearish Marubozu.

1.3.1. Bullish Marubozu

This is the bullish Marubozu candlestick. With its long body and no wick, this candle shows that the buying side dominated the entire trading session without any hesitation between the two sides.

Moreover, the Bullish Marubozu reflects a strong, independent breakout by buyers without interference from sellers, indicating very strong buying pressure.

As a result, in the following trading sessions, the buyers may continue to dominate, and the market is likely to trend upward.

1.3.2. Bearish Marubozu

In contrast to the bullish Marubozu pattern, this is the bearish Marubozu. This candle also has a long body and no wick, signaling that the selling side was in full control throughout the trading session, with no hesitation between the two sides.

Additionally, the Bearish Marubozu represents a strong, independent breakout by sellers without any buying pressure, showing very strong selling force.

Therefore, in the following sessions, the sellers may remain dominant, and the market is likely to continue trending downward.

2. OTHER VARIATIONS OF THE MARUBOZU CANDLE

Similar to other candlestick patterns on the forex chart, the Marubozu also has a few variations in real trading scenarios:

2.1. Bullish Marubozu with Shadows

This is a basic bullish Marubozu pattern but with a small shadow (wick) appearing either above or below the candle body. The wick is very short.

You can observe it more clearly in the illustration below:

For the Bullish Marubozu with an upper shadow, buyers took the lead right from the beginning of the trading session, continuously pushing the price higher. Near the end of the session, sellers attempted to drive the price back down, but the buying pressure was too strong—this is why a short upper wick appears.

For the Bullish Marubozu with a lower shadow, during the early or mid-session, sellers tried to push the price down against the buyers’ strength. Although the price did drop slightly below the opening level, it wasn’t significant. As a result, the lower wick remains very short.

2.2. Bearish Marubozu with Shadows

This is the basic bearish Marubozu pattern, but it includes a small shadow either above or below the candle body. These shadows are minimal and not significant.

You can observe this more clearly in the illustration below:

For the Bearish Marubozu with an upper shadow, it shows that in the early session, buyers tried to push the price higher, but the buying force was too weak, so the price moved up only slightly. The short upper wick is proof of this.

The Bearish Marubozu with a lower shadow indicates that near the end of the session, buyers made an effort to push the price up, but their strength was insufficient—resulting in a short lower wick.

3. HOW TO TRADE WITH THE MARUBOZU CANDLESTICK

The Marubozu candlestick is a pattern that appears frequently on forex candlestick charts. So, how do you trade effectively with this pattern? Finance Solutes will reveal the strategy right below!!!

3.1. Trading the Marubozu Pattern with Support/Resistance Levels

One key application of this candlestick pattern is that the High/Low/Open/Close levels of the Marubozu candle act as important support/resistance zones for price action.

This means:

• The highest price of a bearish Marubozu forms a resistance level.
• The lowest price of a bullish Marubozu forms a support level.

You can observe a real-world example of a Bullish Marubozu pattern on the GBPUSD Daily timeframe below:

As you can see, after the appearance of the Bullish Marubozu, the market moved upward. At the same time, the opening price (which is also the lowest price) of this candle formed a significant support level in the future.

Here’s another real-world example of a Bearish Marubozu pattern on the GBPUSD Daily timeframe:

After the Bearish Marubozu formed, the market moved downward, and the highest price (equal to the closing price) of this candle acted as a key resistance level for price action in the future.

3.2. Trend Continuation Trading with the Marubozu Pattern

Remember, if a Bullish Marubozu candle appears in an uptrend, it is expected that the uptrend will continue. Conversely, if a Bearish Marubozu candle appears in a downtrend, it is expected that the trend will continue to decline in the future.

Steps to trade trend continuation with Marubozu candlestick pattern:

– Determine the current trend of the market: you can observe with the naked eye or use tools such as trend lines, price channels, MA moving averages, etc.

– When the Marubozu candlestick pattern appears, you place a Buy/Sell order as soon as the session forming this candle ends or you can wait for a retest signal back to the support/resistance level formed by the Marubozu price levels.

• With a bullish Marubozu in an uptrend, you place a BUY order when the price breaks the highest level of the Marubozu after the retest.
• With a bearish Marubozu in a downtrend, you place a SELL order when the price breaks the lowest level of the Marubozu after the retracement.

Note: In the case of a retest, the price may only pull back to around 50% of the candle body, or within the range from 50% to the support/resistance level.

Here’s a real-world example on the GBPUSD Daily chart:

In this case, the Bullish Marubozu appears in an uptrend, and the price breaks above the high of this candle, then comes back to retest the price corresponding to 50% of the Marubozu body.

Another example of Bearish Marubozu in a downtrend on the EURUSD Daily chart:

As you can observe, the Bearish Marubozu continuously appears in a downtrend, and then this trend continues. The price comes back to retest the high of the first Marubozu.

4. SUMMARY

So, through today’s forex knowledge article, Finance Solutes has introduced you to the Marubozu candle pattern. We’ve classified Marubozu, and shared with you the most effective way to trade this pattern in the forex market. We hope that what we’ve presented will be helpful to you in your forex trading and investment journey.

Wishing you success in your trading career!!!