WHAT IS A BULLISH MARUBOZU CANDLESTICK?

Marubozu means shaved or bald, implying that there are no or minimal wicks on the candlestick.

TRADING APPROACH TO BULLISH MARUBOZUS

Instead of memorizing dozens of complex patterns, let's focus on one candlestick pattern.
Therefore, we are setting out the approach here and not the hard-and-fast Bullish Marubozu trading rules. These are the steps:

STEP #1: ANALYZE THE MARKET CONTEXT

Analyzing the market context involves finding out if a trend exists, and if so, its direction and strength.

Since the Bullish Marubozu is a single bar candlestick pattern, it makes in isolation. Consequently, gaining a clear understanding of the context becomes much more important.

STEP #2: IDENTIFYING MARUBOZUS

If you take this rigorous approach, you will find that Bullish Marubozu tends to be rare except for fast intraday time frames.

However, remember that we are not just interested in the visual pattern. We are interested in the market sentiment that this implies. Therefore, it makes sense to relax the criteria to accept candles with minimal wicks.

STEP #3: INTEGRATE THE MARUBOZUS TO INCREASE OUR MARKET ANALYSIS

Instead of trying to trade each Bullish Marubozu, it is more productive to use them to improve our analysis.

How do we do it?

The main thing is to focus on the market reaction to each Bullish Marubozu.

When the response to Bullish Marubozu falls short of our expectations, we use that failure to rejuvenate our mindset.

Look for these signs of rejection:

• Powerful Bullish Marubozu without sequel
• Several Bullish Marubozu near the same price level without additional action
• Bullish Marubozu quickly rejected by the market

STEP #4: FIND SUITABLE SETUPS

After we consolidate our market analysis based on observations of Bullish Marubozu, we look for fine-tuning.

Here are some common login tactics:

• Bounces off support/resistance.
• Anticipation of Bullish Marubozu's failure and its extinction.
• Trend line breakout.

Volume Weighted Moving Average (VWMA)

Volume Weighted Moving Average (VWMA) indicates volume by weighing prices based on the volume of dealing activity in a given period. Users can set the length, source, and offset. Prices with high trading activity are weighted more than prices with low trading activity.

During periods of low market volume, SMA and VWMA are close in value. The indicator can be used to recognize and trade trends. A price crossing may indicate a change in direction. VWMA is often used in conjunction with other signals and analysis methods.

Kagi Chart Construction

Kagi charts are made up of a series of vertical lines that reference the price action of an asset, rather than being tied to time as more common charts such as lines, bars, or candles do.

As you can see from the Kagi chart below, the first action traders will see is that the lines on the Kagi chart alter in thickness depending on what the price of the asset is doing. Sometimes the lines are thin and sometimes thick and bold. The different line thickness and direction are the most important features of the Kagi chart because this is what traders use to generate transaction signals.