Marubozu candle

A marubozu is a candle with a long real body and no wicks, or wicks so short that they are hard to see. The open and the close are the two extremes of the period. The word is Japanese and is usually translated as bald or shaved head: the candle has nothing sticking out above or below.

On a normal candle the wicks show where price went and was rejected. A marubozu has no rejection in either direction. Price moved one way from the first trade to the last.

A bullish marubozu, also called a white or green marubozu, opens at the low and closes at the high. Buyers were lifting price from the open and were still buying at the close. No pullback during the period was deep enough to leave a lower wick, and no selling near the end left an upper one.

After a decline or at support it is read as a possible start of a reversal. Inside an advance or on a break out of a range it is read as continuation: demand is strong and often carries into the next candles.

A bearish marubozu, also called a black or red marubozu, opens at the high and closes at the low. Sellers controlled the period from start to finish.

After an advance or at resistance it is read as a possible start of a turn down. Inside a decline or on a break below a range it is read as continuation of the selling.

• Body – long, clearly larger than the recent candles. Many traders compare it with the ATR: a small candle without wicks is not a marubozu.
• Wicks – none on either side. In practice a wick of a few ticks is accepted.
• Full marubozu – no wick at the open and none at the close.
• Opening marubozu – no wick on the side of the open, a small wick on the side of the close.
• Closing marubozu – no wick on the side of the close, a small wick on the side of the open. The close at the extreme is the part that matters most.
• Volume – a marubozu on rising volume is read as a stronger move than one on thin volume.

A marubozu is a statement of strength, so it is traded in its own direction. The risk is that the candle is long and the stop behind it is far away.

• Entry on a breakout – on the close of a marubozu that breaks a range high, a resistance level or a trend line. For a bearish marubozu, the mirror: a break of a range low or support.
• Entry on a pullback – a limit order near the midpoint of the body. Traders treat the middle of a marubozu as a level where the same side may defend its position.
• Stop – beyond the far end of the candle: below the low of a bullish marubozu, above the high of a bearish one. A tighter variant puts it beyond the midpoint.
• Target – the next level in the direction of the move, or a fixed multiple of the risk.
• Invalidation – a close back beyond the open of the marubozu erases the whole candle and cancels the reading.

A marubozu is often the middle candle of a fair value gap: the move is so one-sided that the wicks of the candles before and after it do not overlap. Traders who use Smart Money Concepts watch that gap for a retest. The pullback entry near the midpoint of the body and the entry at the gap are frequently the same area on the chart.

• Chasing the close – entering at the end of a very long candle puts the stop far away. A pullback entry or a smaller position solves it.
• Ignoring context – a bullish marubozu straight into resistance, or late in a long advance, can be the last burst of buying rather than a start.
• Counting small candles – a short body without wicks in a quiet market says little.
• Reading one candle as a trend – a marubozu shows control for one period. The next candles confirm it or erase it.
• Checking only one time frame – a marubozu on a 5-minute chart may be a small part of an ordinary candle on the hourly chart.