Marubozu: A candle without upper or lower shadows is known as a ‘marubozu’ candle. In Japanese, marubozu means ‘closely cropped or bald’. A bullish marubozu candle is formed when the price starts to increase right from the start of the trade, ie, the open equals low, and the bullish fervour continues till the end (close equals high). This indicates that the bulls control the price action from the beginning till the end and is, therefore, considered bullish. Similarly, there will be days when the price continues to fall right from the opening, ie the open and high will be same, and ends the day on a low, that is, the close and low will be the same. This bearish marubozu is a clear case of bear dominance and, hence, is considered bearish.
Long vs short body: Just like the length of the shadow, the length of the body is also very important. This is because the length of the body, or the gap between open and close, represents the ability of bulls and bears to influence the price during that day. A long body in a bullish candle means that bulls were in control that day, while a long bullish marubozu candle means an absolute control by bulls. Similarly, a long bearish candle means bear control, and a long bearish marubozu translates to an absolute bear control on that day.
Doji: Doji patterns are formed when the day’s trading ends at the opening price itself. Since open and close are at the same place, there won’t be a body for the candle. The word ‘doji’ in Japanese means ‘clueless or clumsy’ and represents the ‘indecisiveness’ in the market. Since the bulls and bears fail to register any gains during the day, doji candles are considered neutral patterns. However, doji candles gain importance depending on the place where they are formed. For instance, it is considered bearish if it occurs after a long white candle because it indicates that the bulls are getting exhausted. Similarly, a doji that is formed after a long black candle means the bears are becoming exhausted and, therefore, it is considered bullish.
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3 Comments on this Story
Bio Science Tutorial150 days ago
candlesticks patterns useful for me thank you.
Deo Shankar Kumar255 days ago
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Santosh Mahatme340 days ago