Chapter 4 Marubozu
Marubozu is the name of a Japanese candlesticks formation used in technical analysis to indicate an asset has traded strongly in one direction throughout the session and closed at its high or low price of the day. A marubozu candle is represented only by a body; it has no wicks or shadows extending from the top or bottom of the candle.
A perfect marubozu is very rare in actual market condition. Hence, sometimes a minor difference between the open/close price with high/low price is neglected while identifying marubozu.
A marubozu candle can be of two types - the Bullish Marubozu and the Bearish Marubozu.
Bearish Marubozu
A bearish marubozu suggests extreme bearishness in the market. Here, that the high price is equal to the open price and the low price is equal to the close price. A bearish marubozu signifies that the sellers are in absolute control of the market. There is so much selling pressure that the market participants are willing to sell the currency pair at every price point during that session. Therefore the price closed near its low point for that session.
If the bearish marubozu appears in a downtrend, it denotes a strong trend continuation. But appearing in an uptrend, it works as a trend reversal pattern, i.e. - that the market's sentiment has changed and the market is now bearish.
The real expectation is that with this sharp change in sentiment there will have a surge of bearishness and the bearishness will continue over the next few trading sessions. Hence a trader should look for selling opportunities after the occurrence of a bearish marubozu. The suggested selling price
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