The marubozu candle on gold

The marubozu is a candle with a full body and little or no shadow. It means the market opened at one extreme and closed at the other. This page explains what the bullish and bearish versions say about the session, and the difference between a marubozu and an ordinary long candle. The pattern describes what price has already done, not what it will do next.

What a marubozu is

A marubozu is a candle with a full body and little or no shadow. The body runs from the open to the close, and there is no wick on either end. A bullish marubozu opens at the low and closes at the high. A bearish marubozu opens at the high and closes at the low. The candle is a solid block.

The word marubozu means 'bald' in Japanese, and the candle is bald because it has no shadows. The shadow is the line above or below the body. In a marubozu, the shadow is absent or very small. The candle shows that one side was in control for the entire session.

How this site's rule reads it: rule MB-1 asks for a single candle whose range is at least 1.5 ATR and whose body is at least 95 percent of the range, so the shadows together may take at most 5 percent. It is white (up) or black (down) by its close against its open, and it counts as formed when the candle closes. A candle with a wick of 10 percent is not a marubozu here.

What the bullish marubozu says

A bullish marubozu opens at the low and closes at the high. It means that buyers were in control from the open to the close. The price did not fall back after the open, and it did not pull back before the close. The session was one-way up. The candle is a sign of strong buying pressure.

The bullish marubozu is a single candle, and it describes one session. It does not say what will happen next. It says that on that day, buyers were dominant. The candle is a fact about the session, not a forecast for the next session.

What the bearish marubozu says

A bearish marubozu opens at the high and closes at the low. It means that sellers were in control from the open to the close. The price did not rally after the open, and it did not bounce before the close. The session was one-way down. The candle is a sign of strong selling pressure.

The bearish marubozu is a single candle, and it describes one session. It does not say what will happen next. It says that on that day, sellers were dominant. The candle is a fact about the session, not a forecast for the next session.

The difference between a marubozu and an ordinary long candle

A marubozu is a long candle with no shadows. An ordinary long candle may have shadows on one or both ends. The shadows show that price traded beyond the open and close, but then came back. In a marubozu, there is no such trading. The open and close are the extremes of the session.

The difference matters because the shadows show rejection. A long candle with a long upper shadow shows that price rose but was pushed back down. A marubozu shows no rejection. The marubozu is a stronger statement of one-sided control.

The candle on the chart

The chart under the heading is a marubozu on gold futures (GC=F), the black candle of 28 February 2020. It opened at 1,640.30 dollars per ounce, reached a high of 1,642.50 and a low of 1,564.10, and closed at the low, 1,564.10. The range is 78.40 and the body 76.20, which is 97.2 percent of the range, inside the 95 percent the rule demands, and well above the 1.5 ATR range it also requires.

It is the cleanest by the rule's own measure of the 21 candles rule MB-1 found. The chart shows how little shadow such a candle has, and nothing about the session after it.

What the marubozu cannot tell you

The marubozu cannot tell you whether the move will continue. It only shows that one side was in control for one session. The next session may be different. The marubozu also cannot tell you how far price will go. That is a question about the future, and the chart only has the past.

The marubozu is a description of what price has already done. It does not predict what price will do next. A pattern describes what price has already done and does not predict what it will do next. That is the plainest way to say it, and it applies to every pattern on this site.

What the count says

Rule MB-1 found 21 marubozu candles in ten years: 19 on gold futures and 2 on the SPDR gold fund. A body of at least 95 percent of a range of 1.5 ATR or more is demanding, and the difference between the two instruments is large, which is a property of how these two series print their bars, not a statement about gold.

The page draws the cleanest of the 21. It is a black candle that closed on its low.

A marubozu after a weekend gap carries a different weight

A bullish marubozu after a gap up shows that the higher open did not attract immediate selling. The price kept rising until the close, which is unusual after a gap because many traders expect a pullback. When that pullback does not come, the gap can act as support rather than a trap. The marubozu confirms that the gap was not just a thin overnight quote.

A marubozu can mark exhaustion, not just continuation

Most descriptions say a bullish marubozu is a sign of strength and a bearish one is a sign of weakness. That is true, but only for that session. After a long rally, a bullish marubozu may be the last burst of buying before the market runs out of buyers. When everyone who wanted to buy has already bought, the next session can open flat or lower. The marubozu then becomes a trap for latecomers.

A useful check is where the marubozu appears. If it is the first marubozu after a long quiet period, it often starts a move. If it is the third or fourth in a series of strong candles, it may be the last. The market's energy is not infinite. A marubozu uses a lot of energy in one session. After several such candles, the move is often stretched and due for a pause, even if the trend remains intact.

Checking a marubozu yourself

Open a daily chart of gold futures or of the SPDR gold fund and find the session of 28 February 2020 on the futures. Read its four numbers: open 1,640.30, high 1,642.50, low 1,564.10, close 1,564.10. Subtract the low from the high for the range, 78.40, and the close from the open for the body, 76.20. The body divided by the range is 97.2 percent. The rule asks for 95 percent or more and for a range of at least 1.5 ATR, so the candle passes by a small margin on the first test and a wide one on the second.

Now take a candle you suspect is a marubozu and do the same arithmetic. If the shadows together take more than 5 percent of the range, it is not one under this rule, however clean it looks on a phone. The check takes a minute and needs no tool but a platform that shows the numbers.

How the caption under the chart is written

The caption under the chart gives four facts in a fixed order: the instrument, the source with a link, the date the history was read, and how many occurrences the rule found. For this page the count is 21, and the instrument is gold futures. A reader can follow the link, open the same symbol and compare the candle of 28 February 2020 number for number. Where the numbers differ, the desk wants to hear about it, and the page is corrected with a date.