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Candlestickpattern

One candlestick pattern - The MarubozuHey everyone! In this post, we are going to talk about a candlestick pattern known as Marubozu, along with a few exhibits that may help you solidify your understanding of this pattern. Please remember this is an educational post to help all of our members better understand concepts used in trading or investing. This in no way promotes a particular style of trading! The candlestick charts offer a quick picture into the psychology of buyers and sellers. Before proceeding further, a few things to keep in mind: → A bearish candlestick indicates the opening price of the session being higher than the closing price. → Similarly, a bullish candlestick indicates the opening price of the session being lower than the closing price. → The shadow at the top and bottom represent the high and low for the session. → The size of the real body is indicative of the strength of the trend. What is a Marubozu pattern? A Marubozu is a candlestick with a full real body and no shadows. This solid body indicates a strong trend, be it in any direction. The name Marubozu comes from the Japanese and means "close-cropped", indicating a candle with no shadow. Marubozu can be divided into two types, depending on the bias. ∎ Bullish marubozu ∎ Bearish marubozu A Marubozu can appear anywhere in the chart irrespective of the prior trend; the trading implication remains the same. ⚠️ Please notice the textbook definition of a Marubozu is a candle with no shadows. However, in practice, the ideal setups rarely occur. Hence, there is a little bit of wiggle room on either side. 🟩 Bullish Marubozu → In a bullish Marubozu, the lack of the upper and lower shadow indicates that the low and high are equal to the open and close, respectively. However, there may be some shadows in reality, therefore we must be versatile within limits. → A bullish Marubozu indicates that market participants are willing to buy the stock at any price point throughout the day. As a result, the stock closes near the session's high. → In general, the occurrence of a bullish Marubozu indicates that the sentiment has strongly shifted to the upside and we can see higher prices in the coming sessions. Hence a trader should look for buying opportunities whenever the price pulls back to lower levels. Exhibit 1: Bullish Marubozu Exhibit 2: Bullish Marubozu with subsequent uptrend 🟥 Bearish Marubozu → In a bearish marubozu, the open price is almost equal to the high whereas the session closes near the low price. → A bearish Marubozu indicates a strong bearish sentiment because the market participants are willing to sell the stock at any price point throughout the day. → In general, the occurrence of a bearish Marubozu indicates that the sentiment has strongly shifted to the downside and we can see lower prices in the subsequent sessions. Hence a trader should look for selling opportunities whenever the price pulls back to higher levels. Exhibit 1: Bearish Marubozu Exhibit 2: Bearish Marubozu with subsequent down trend Thanks for reading! Hope this was helpful! See you all next week. 🙂 – Team TradingView Feel free to check us out on Instagram , Telegram , and YouTube for more awesome content! 💘
NSE:TITANEducation
by TradingView
8
Nifty Divergent AnalysisHello traders, Here are few observations on Nifty that I would like to share with you. ✅ Tools Used >> Bollinger Band (BB) (20,2) >> RSI (14) >> Candlesticks Chart (Daily) ✅ Reversal Trade Setup Criteria >> Price outside the BB for the second time with a higher high (HH) or lower low (LL) formation >> While price is outside BB for the second time, there is divergence on RSI (Divergence discussed below) >> There has to be two Bearish/Bullish (as the case may be) candles, accompanying the above conditions, to take the trade >> Target (at the very least) would be the other side of the BB 🚩Divergence is a condition when the price is making higher highs but the RSI is not. RSI would be either flat (at same level to previous swing) or lower. This means that the price is inching up but bulls are losing strength. Similarly, when price makes lower lows but RSI is making higher lows or is flat then this is also called divergence. It means bears are losing strength. Now sit tight and observe all the setups shown on the chart (AB, CD, EF, GH) and see how they worked. Recently Nifty made a swing high at 'I' but it was not an extreme condition because price was well contained with in the BB and not rushing outside of it. RSI was highly overbought though. For the required setup, we need two swing highs peeking outside BB and divergence on RSI with two bearish candles to go short. Let's see if we get the same setup this time or not. I hope you found this idea interesting. Thanks for reading.
NSE:NIFTY
by Bravetotrade
5