Technical Candlestick Pattern Using A Single Candle- Marubozu

 

A single candlestick pattern is formed when only one candle is used. Thus a single candle gives you a trading signal. These single candlestick patterns are very profitable if you know how to spot and execute them right.

When you trade based on single candlestick patterns using an automated trading robot you need to notice the length of the candle. The length is a representation of the trading range. When the range of the candle is huge then this means that there has been significant activity in the day. When the range of the candle is short then the action was not a lot.

There are many single candlestick patterns. It is important to know some of them to take trades using technical candlestick patterns.

The Marubozu

The Marubozu is a single candlestick pattern and this means bald in the Japanese language. The Marubozu is divided into bullish and bearish Marubozu.

As a general rule when you trade candlesticks you should buy the strength and sell when it is weak. Understand that it is important to be flexible with the pattern and look for the prior trend when you place a trade.

However, the Marubozu pattern makes a difference here because it violates the third rule. The Marubozucandle can be formed anywhere which is irrespective of what the prior trend was. The trading method stays the same though.

The Marubozu candlestick pattern is a single candlestick pattern. Here the candlestick does not have an upper or a lower shadow and it just has a body.

Bullish Marubozu

There is no upper and lower shadow in a bullish Marubozu and thus when this happens then the low of the candle is equal to the open of the candle. When the low is equal to the open and the high is equal to the close then a bullish Marubozu is formed.

When there is a bullish Marubozu it indicates that there is a lot of buying interest and that the market participant is ready to buy into the market at every price. This is indicated by the close which is the high of the day. The previous day sentiment does not matter much because the traders are now very bullish on this stock.

The expectation is that because of the sudden sentiment change there is a surge in bullishness and the traders will stick to this bullish view for the next few days to come. Thus on seeing a bullishMarubozutraders should look to buy into the stock. The buy price of the trader should be close to the closing price.

It could happen that the closes not the actual high. This is generally acceptable if the stock close is just a few percentage points below the high of the day.

 

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