A Marubozu is a candlestick charting pattern that signifies that the price of an asset did not trade outside of the starting and closing price range. There is no shadow on this candlestick pattern. In this lesson, we'll look at how the Marubozu candlestick pattern predicts a price turnaround after a bearish trend, as well as a trading strategy that uses the "Marubozu" candlestick pattern.

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

A Marubozu is a candlestick charting pattern that indicates that an asset's price did not trade outside of its opening and closing price range. This is because such a candle does not have at least one shadow, signaling that the opening or closing price will be equal to one of the candle's maximum values.

• Marubozu is a Japanese term that means "close-cropped" and refers to a long-bodied candlestick with no shadow.
• Technical traders utilize candlestick charts to look at the opening and closing prices on a particular day.
• Depending on whether the candle is moving up or down, a candlestick with no shadows is viewed as a strong indicator of conviction by either buyers or sellers.
• The bullish Marubozu candle (closing white) can signal a reversal when it is found at the end of a downtrend because it shows that the sentiment has shifted and the bulls are likely to push the asset higher.
• In a downturn, the bearish Marubozu candle (opening white) might foreshadow increased selling pressure, especially if it appears at the peak of an uptrend.

There are no shadows on the tall white body of the white marubozu candle pattern. White marubozu candles, as one might expect, can appear anywhere in a trend and, 56 percent of the time, they indicate that the trend will continue. The pattern's psychology is one of optimism. As bullish buying demand drives the stock higher, the price opens and moves upward. By the end of the day, the price has been locked at the day's high, never dipping below the opening price or giving the bears a chance to cause trouble. But the good times may come to an end because anything could happen the next day.

• Look for a Bullish (Green or white) candle with a body taller than average and have no shadows.

When the opening white marubozu is compared to the opening black marubozu, the white candle is more powerful. White marubozu candles can appear anywhere in a trend and, 54% of the time, they indicate that the trend will continue. The beginning white marubozu, on the other hand, is more closely related to a flipped-over closing white marubozu. The colors are the same, and the shape is the same as well.

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

• Look for a Bullish (Green or white) candle with a body taller than average and have an upper shadow but no lower shadow.

The closing white marubozu is the diametrically opposed closing black marubozu. The white candle is the more powerful of the two, with a 55 percent continuance rate. When the bulls have the ball, the psychology behind the closing white marubozu pattern begins. During the day, the bears seize the initiative, and the price falls below the open, creating a lower shadow. The bulls, on the other hand, have scored more points by the conclusion of the day, and the price closes at the day's high. The next day, price could go up or down, but given the bullish fervor seen in the tall white candle, price is more likely to continue going higher and stage an upward breakout.

• Look for a Bullish (Green or white) candle with a body taller than average and have an lower shadow but no upper shadow.

A Marubozu candle can be used as a standalone indicator. Nonetheless, it is frequently seen in conjunction with other candlesticks during a clear trend, indicating trader mentality and future price action. Establishing a trend is one of the most difficult aspects of candlestick trading. Traders utilize the Marubozu pattern in conjunction with a trend indicator, such as a moving average line, to assist offset this difficulty. This can help identify an upward or downward trend and determine whether it will continue or reverse.