What it means
Candlestick charts show four prices for each period: the open, high, low and close. The body is the rectangle between the open and close, and the thin lines above and below, called shadows or wicks, show how far the price travelled beyond them.
A marubozo has a body that fills the whole range, so there are no shadows or only tiny ones. The word comes from Japanese and is often translated as bald or shaven head, which is a handy way to remember that the candle has no wicks.
A white or green marubozo opens at the low and closes at the high, so buyers were in charge from the first trade to the last. A black or red marubozo opens at the high and closes at the low, showing sellers in control throughout.
Marubozo candles also come in different sizes, and size matters. A long marubozo that is much bigger than the recent candles is stronger evidence of conviction than a small one that is barely larger than the usual daily movement.
Traders use the pattern as a signal of momentum. A bullish marubozo after a long decline might hint at a reversal, while one in the middle of an uptrend can suggest the trend is continuing, and more conservative traders wait for the next candle before acting.
Like any chart pattern, it is a guide rather than a guarantee. Time frame matters, since a marubozo on a five-minute chart is far less meaningful than one on a weekly chart, and many analysts combine it with trading volume, support and resistance levels, and the wider news background.
In practice
Real-world examples.
Example
A swing trader notices a white marubozo on the daily chart of a retail company after strong earnings. Volume is double the usual level, which supports the signal, and she adds to her position with a stop-loss just below the candle's low. If the price falls through that level, the pattern has failed and she exits.
Example
A currency trader sees a black marubozo on the hourly chart of a euro-dollar pair after an interest rate announcement. He interprets it as sustained selling and reduces his long position.
Example
A financial adviser explaining technical analysis to a client uses a marubozo as a simple example. She shows that the chart reflects one thing only, the pattern of prices, and says it cannot explain why buyers were so keen. She encourages the client to look at company news and fundamentals as well.
Formula
Calculation
Body size = Closing price - Opening price
Body as a share of range = Body size / (High - Low)
A share opens at $50.00, rises steadily and closes at $54.00 with a high of $54.00 and a low of $50.00. The body is $54.00 - $50.00 = $4.00, and the high-to-low range is $54.00 - $50.00 = $4.00.
Body as a share of range = $4.00 / $4.00 = 100%, which is the textbook marubozo. In practice analysts accept candles where the body is, say, 95% or more of the range, as the shadows are then too small to matter.Case study
Seen in the real world.
Falconbridge Analytics is an illustrative, fictional research firm whose junior analyst flagged a white marubozo on the weekly chart of a mid-sized manufacturing company. The candle rose from $30 to $36, with almost no shadows, on volume well above average.
The senior analyst asked what had driven it. The analyst found that the company had announced a major contract that week, which explained the unanimous buying, so the pattern was backed by news rather than just a chart shape.
The firm used the candle as one input in its decision to buy, setting a stop just under $30 to limit the loss if the move reversed. In this illustrative story the lesson was that a marubozo is more convincing when volume and news agree with it. The firm recorded the trade in its journal so that it could later compare its marubozo signals with the results actually achieved.
Watch out
Common mistakes.
- Treating a marubozo as a guaranteed prediction, when it only describes what happened in one period.
- Ignoring the time frame, so a one-minute candle is given the same weight as a weekly one.
- Confusing a marubozo with a doji, which has a tiny body and signals indecision rather than conviction.
Questions
People also ask.
What does a marubozo mean?
It means one side, buyers or sellers, dominated the whole period, with the price opening near one end of its range and closing at the opposite end.
Is a marubozo bullish or bearish?
A white or green one is bullish and a black or red one is bearish, though context decides how much weight to give it.
Can a marubozo have small wicks?
Yes, some analysts allow very small wicks and call those versions opening or closing marubozos, depending on which end is flat.
From the founder's library
Take it further with the book.
Build your financial confidence beyond this definition. Shihan's full-length guide, Accounting Fundamentals, takes the same plain-English approach and turns it into a complete, practical playbook for non-finance managers, business owners and students - with chapter-end quiz answers and presentation slides included.
25% off with code MMHQ25, applied at checkout. Priced in USD - checkout may show the equivalent in your local currency.
View the book and save 25%Related