In this lesson, we'll explore how the Marubozu candlestick pattern signals a price reversal following a bullish trend. We'll also discuss a trading strategy that effectively incorporates the Marubozu pattern to capitalize on these potential market turnarounds.

• What is the Marubozu Pattern?
• Introduction to the Black Marubozu Pattern
• Introduction to the Opening Black Marubozu Pattern
• Introduction to the Closing Black Marubozu Pattern
• Limitations of Using the Black Marubozu Pattern

A Marubozu candlestick charting pattern implies that the price of an asset did not trade outside of its starting and closing price range. This is due to the fact that such a candle lacks at least one shadow, indicating that the opening or closing price will be equal to one of the candle's maximum values.

• Marubozu is a Japanese word that meaning "close-cropped" and refers to a candlestick with a long body but no shadow.
• Candlestick charts are used by technical traders to examine the starting and closing values on a given day.
• A candlestick with no shadows is considered as a strong indication of confidence by either buyers or sellers, depending on whether the candle is heading up or down.
• The bearish Marubozu candle (opening black) may indicate increasing selling pressure during a downturn, especially if it emerges at the top of an uptrend.

The tall black body of the black marubozu candle design has no shadows. As one might imagine, black marubozu candles can emerge anywhere in a trend and, 54% of the time, they imply that the trend will continue. The psychology of the pattern is one of optimism. The price opens and swings downward as negative sailing demand drives the stock down. The price has been trapped at the day's low at the end of the day, never dropping below the closing price or allowing the bulls an opportunity to cause problems. But, because anything might happen the next day, the good times may come to an end.

• Look for a Bearish (red or Black) candle with a body taller than average and have no shadows.

When comparing the opening black and white marubozu candles, the white candle is more potent. Black marubozu candles can occur anywhere in a trend, and they signal that the trend will continue 53% of the time. On the other hand, the opening black marubozu is more closely connected to a flipped-over closing black marubozu. The colors are same, and the form is also identical.

The psychology behind this pattern begins with the bears drive price lower immediately from the start. Before the bulls realize what has transpired, their sailing pressure propels the price downward. When the bulls emerge from their slumber, they drive prices higher, leaving only a tall black candle with an bottom shadow but no upper shadow.

• Look for a Bearish (red or Black) candle with a body taller than average and have an lower shadow but no upper shadow.

The conclusion The closing white marubozu is diametrically opposite to the closing black marubozu. With a 56 percent success rate, the black candle is the more potent of the two. The psychology underlying the closing black marubozu pattern begins when the bears have the ball. The bulls gain the initiative during the day, and the price rises above the close, generating an upper shadow. The bears, on the other hand, have scored more points towards the end of the day, and the price closes at its lowest point of the day. Price might move up or down the next day, but given the bearish intensity indicated in the towering black candle, it's more likely to keep heading down and produce a negative breakout.

• Look for a Bearish (red or Black) candle with a body taller than average and have an upper shadow but no lower shadow.

A Marubozu candle can be utilized independently of other indicators. Nonetheless, during a definite trend, it is commonly observed in combination with other candlesticks, signaling trader attitude and probable price movement. One of the most challenging components of candlestick trading is establishing a trend. To help overcome this issue, traders use the Marubozu pattern in combination with a trend indicator, such as a moving average line. This can assist in determining whether an upward or downward trend will continue or reverse.