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Chapter 9, Part III. Simple but fundamental and important patterns. Page 4

Discussion in 'Complete Trading Education- Forex Military School' started by Sive Morten, Dec 15, 2013.

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  1. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Commander in Pips: Good, let’s shift to the next pattern – Marubozu or Marubozo.

    Pipruit: Maru.. what? Commander, I think, I’ve just broken my tongue. May be there is some ordinary names?​

    Commander in Pips: Son, this is Japanese candlesticks. What names are you expected? Compose yourself!

    Pipruit: Yes Sir!​

    Commander in Pips: Ok, Marubozu is a kind of candle with no shadows. It means that market has shown direct move right from the high/low to “low/high. White Marubozu (i.e. up candle) has open price that is equal to the low and a close price that is equal to the high. Marubozu should have a long body. A small candle with the same qualities is not a Marubozu.

    Black Marubozu, in opposite, has a long black body with opening price right at the high and closing price at the low. Look at this sweet pair at the picture – it becomes much simpler to understand:

    [​IMG]
    Black and white Marubozu – nothing to add here…

    And here how it looks like in real life:

    [​IMG]

    I think that you understand that this is very strong candles that show the domination of bulls (white Marubozu) or bears (black) during the whole trading period. Because, say, during a white Marubozu the market opens at the low price and closes right at the high – so, bulls push the market up without giving bears any chance during the whole period. The same is true for black candle – bears dominate right from the highs until the lows. Usually (but not always), after appearing of Marubozu we can count on some continuation of this move – at least in the beginning of a next trading period, because the market has some momentum. Also Marubozu very often becomes a part (one of the candles) of reversal patterns. You can see it later.
     
    Hamza Samiullah and fran alvarez like this.
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