In crypto analysis, one type of candle is called the Marubozu Candle.
The Marubozu Candle is a pattern often used in the crypto trading analysis. Let’s learn how to use it in full here!
What is a Marubozu Candle?
The Marubozu candle is a type of reversal candlestick with a long body which indicates a price reversal.
In Japanese, “marubozu” means “bald head,” aka “bald.” The term refers to the absence of a wick (shadow) on a candle or wax.
That is, the opening or closing price will equal the candle’s maximum price.
Due to the absence of an upper and head shadow, this candlestick can be recognized very well.
An asset price opens at the highest and will close at the lowest point, and vice versa.
Easy Way to Identify Marubozu Candle
How to identify this candlestick is quite easy. That’s because Marubozu has very striking characteristics, which are as follows:
- The perfect Marubozu only has a long-body candle.
- There are no shadows on either side of the trunk. It can also be said that there is no axis/tail.
- Marubozu consists of 2 types: bullish (green/white) and bearish (red/black).
Perfect Marubozu is rather rare under actual market conditions.
Usually, this Marubozu pattern will always show the difference/difference in numbers between the open price and the highest price or the close price and the lowest price.
Thus, there will still be a shadow or wick on the candlestick.
Therefore, the axis/difference between the open/close price and the high/low price is generally 0.01% of the candle size and tends to be ignored when identifying this type of candlestick.
Types of Marubozu Candles
The Marubozu candlestick pattern has various or different types. The following is an explanation of the three types.
1. Marubozu Open
Open positions represent periods of flat opening time. This Marubozu describes the price of an asset only moving in one direction since the beginning of the period.
However, this does not close the period before some retracement in the opposite direction.
2. Marubozu Full
This one has a flat open and closes without a wick in all candlestick patterns.
3. Marubozu Close
Close has no shadow at the closing level. The chart will show that the price may have moved in one direction after opening the session but continued to rally in the opposite direction before closing the session without any retracement.
Bullish signals that the price opened at a lower point and then will close at a higher point.
This can happen because the buyer controls the price of an asset. “Marubozu White” is another name for this pattern.
Bearish indicates that the price of an asset opened at a higher point, and later the price of the asset closed near a lower level.
Related to that, the seller controls the price of an asset. For your information, the color of this pattern can change depending on the chart settings. This pattern is also known as “Marubozu Black.”
How to Use Marubozu when Trading Crypto
Marubozu can be found on all asset charts and time frames.
In addition, this candle can also be used as a technical analysis to show how assets were traded that day.
When using this chart, traders will generally wait for another confirmation/candle pattern before entering the market.
Also, to be understood, Marubozu rarely occurs in chart movements on the market.
Even so, if this pattern occurs, it will usually show strength.
When the bullish Marubozu pattern occurs, for example, it means that the bulls are still strong and holding back pressure from short sellers.
Therefore, in some cases, the bullish Marubozu tends towards the continuation of an uptrend in the market.
On the other hand, a bearish Marubozu is usually present to signal the strength of the bears.
When that happens, it’s usually a sign of a bearish trend that will continue.
However, there are no standard principles regarding this type of candle.
Besides that, there are times when this pattern will lead to a consolidation of a trend in the market.
It can be concluded that Marubozu is a reversal candlestick with a long-body candle.
This type of candle indicates a price reversal because the opening or closing price will later equal the maximum price in the candle.
This candlestick pattern is divided into several types, starting from Marubozu open, full, to close.
So, now you understand about Marubozu Candle.
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