This is one of the most important signal candlesticks. You may encounter it very often in the Japanese candlestick chart. Marubozu candlestick is considered a sign of the upcoming price trend in Crypto trading strategy.
In this article, I will show you how to identify a Marubozu candlestick. At the same time, I will also show you how to open Crypto orders with this special candlestick pattern.
What is a Marubozu candlestick?
Marubozu is a candle with a body only and without a shadow. It is usually much longer than surrounding candles. Marubozu represents a strong buying or selling force appearing on the market.
Characteristics to identify it
In general, A Marubozu candlestick has a very long body. The closing prices and opening prices are often far apart. This special candlestick pattern has no shadow (only 1 body with a single color). There are 2 types of Marubozu: The colors are green (Bullish Marubozu) and red (Bearish Marubozu).
Bullish Marubozu: It demonstrates a sharp increase in prices. The buyers dominate and overwhelm the sellers. The opening price coincides with the lowest price. And the closing price coincides with the highest price. Bullish Marubozu is a warning signal that prices can increase strongly in the future.
Bearish Marubozu: It demonstrates a sharp decrease in prices. The opening price coincides with the highest price. And the closing price coincides with the lowest price. Bearish Marubozu is a warning signal that prices can decrease sharply in the future.
Several other variations of Marubozu
In addition to the basic types of Marubozu, in Crypto trading, traders are also interested in other variations of Marubozu which are Open Marubozu and Close Marubozu.
However, in terms of efficiency, Marubozu without shadow or wick still gives the highest accuracy.
How to use Marubozu candlestick in Crypto trading strategy
Based on the signals that Marubozu brings, we can open orders in accordance with the upcoming price trend. Specifically, when a Bullish Marubozu appears, you should focus on opening BUY orders. When a Bearish Marubozu appears, open a SELL order.
How to open an order is as follows:
Open a BUY order with the Bullish Marubozu as follows:
+ Entry Point: As soon as the price finishes creating a Bullish Marubozu.
+ Stop-Loss: At the nearest support before the Marubozu candlestick appears.
+ Take-Profit: when the price touches old resistance levels that have been formed in the past.
Open a SELL order with the Bearish Marubozu as follows:
+ Entry Point: As soon as the price finishes creating a Bearish Marubozu.
+ Stop-Loss: At the nearest resistance before the Marubozu pattern appears.
+ Take-Profit: when the price touches old support levels that have been formed in the past.
Marubozu is a special candlestick that you need to pay attention to every time it appears on the chart. Mastering the skill of using Marubozu in analyzing will help you trade Crypto more effectively.