Results 1 to 6 of 6
  1. #1
    Rookie Member

    Marubozo candle sticks. !!!

    Im studying the Marubozo candlestick. (I'm in Primary school Yeeii)

    the picture that shows how a marubozo works (check the link)

    It shows to marubozo bears. One false and one true.

    My question is. Why was it on that particular marubozo that it was a real bear and the other one was not. Mind you I'm still learning about resistance and support. The way I see the chart I see a lot of marubozo bears and bulls but there were not that strong. Is there like a rule that depending on the length of the candlestick is how long the bear or the bull is going to last.


  2. #2
    Legendry Member Michael Hodges's Avatar
    Marubozo is a tough one. It really isn't a signal in and of itself, all it shows is a strong movement for one day, one hour or one minute depending on your time frame chart. It can be a good indication of a direction, but typically we'd like to see it confirmed. The first, false, break out has a marabuzo, but when price moves up to test is previous support has turned to resistance we see that it hadn't, prices move back up through the broken support line, regaining support. If prices had been rejected at that line that one would have been confirmed...understand so far? The second one was a much stronger marubozo and moved prices significantly below the broken support line, and then confirm with a small upward retracement and then fall again... it is the confirmation of the candle and not the candle itself that is the signal...

    Now, when using the long candle, marubozo, it is important to take into consideration the length of the candle relative to other candles. in the first instance it is a long candle, but not noticeably longer than other long candles on the chart. The second one is very noticeably longer, which makes it more important. When you go from asset to asset each will have different types of candles appearing on a regular basis, some tend to trade with smaller candles, some with larger candles. It's not so much the size of the candle, as it the size of the candle relative to what you might normally encounter during regular trading... for instance, a volatile asset may tend to show a lot of marubozo candles, it will be the one that is obviously the largest one over the course of the last year, month, week or day that is important, not just any old long candle.

    Let me know if you have any questions. REmember, with candles the signals are not set in stone, it's like reading tea leaves, you have to interpret them to know what they are saying.

  3. Thanks vulgartrendkill thanked this post
  4. #3
    Senior Member vulgartrendkill's Avatar
    Michael has hit the nail on the head. in order to read the candles, I feel its important to take it in context with the other candles surrounding it. Without that, it really doesn`t mean a great deal by itself. I find it helpful to look at each candle as a story.

    I does sound like you are on the right track!!

  5. #4
    Legendry Member Michael Hodges's Avatar
    DaniBinary101, this is such a good question and discussion on Marubozo that I've moved it to the tools room, and will include a link to this discussion in the Japanese Candlesticks discussions! Good job!

  6. #5
    Legendry Member Okane's Avatar
    I was going to do a long post but Michael gave you the perfect answer.
    A textbook candlestick and a real life one are not always the same.
    Also, don't stare blindly at candlesticks just like Michael mentioned.
    It's crucial that you see the bigger picture. The price action, the trend, the
    volatility. One little candle in the middle of the price indicating trend shift doesn't mean anything really.
    It's when you put it all together that you will find those that really mean something! That my friend, is
    the art of price action trading.

    Regardless, I admit it was good question. If you don't ask, you wont learn!
    Live Webinar: Hidden Content
    Join My Skype Group: Hidden Content

  7. #6
    Legendry Member Michael Hodges's Avatar
    And never forget, Marubozo is just a Long white candle with shaven top/bottom... a variety of candle and only a signal when OTHER factors apply such as volume, size, s/r etc...

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts