A nice simple one for the end of the week - or would be, except that definitions of the Marubozu can vary…

The majority view seems to be that marubozu = a candlestick with no upper or lower shadows.

Some will use the term to describe a candlestick with one shadow, usually trailing the trend direction, so that an open (bullish) candle will have a lower shadow and conversely a bearish has an upper shadow.

In Japanese, it means “close-cropped.” Typically, the marubozu is a long candlestick - the trend has been significant through the period. If short in length, then any analysis has a lower confidence.

For an open/green candlestick, the opening price equals the low, while the close equals the high. The trading has been fimly bullish through the period. Similarly, for the filled/red candle - bears have held the market through the period.

Some will consider a marubozu appearing against a mature trend as a more definite signal of reversal than a shadowed candlestick - the grounds for this are not strong. Yes, there’s been a reversal through the period, but whether marubozu or not, wouldn’t at first sight seem to make a significant difference.

One Response to “Forex candlestick charts: Marubozu”

1. Forex » Forex candlestick charts: Marubozu says:

   October 17, 2008 at 12:42 pm

   [...] the rest of this great post here [...]

   Reply