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Opening Black Marubozu Candle Pattern

My book, Encyclopedia of Candlestick Charts, pictured on the left, takes an in-depth look at candlesticks, including performance statistics.

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Opening Black Marubozu Candlestick: Important Results

Theoretical performance: Continuation Tested performance: Continuation 52% of the time Frequency rank: 5 Overall performance rank: 58 Best percentage meeting price target: 75% (bull market, up breakout) Best average move in 10 days: 4.63% (bear market, up breakout) Best 10-day performance rank: 37 (bear market, up breakout) All ranks are out of 103 candlestick patterns with the top performer ranking 1. “Best” means the highest rated of the four combinations of bull/bear market, up/down breakouts. The above numbers are based on hundreds of perfect trades. See the glossary for definitions.

Opening Black Marubozu

Opening B

Opening Black Marubozu Candlestick: Discussion

Theory matches reality found from testing: The opening black marubozu candlestick acts as a continuation of the existing trend 52% of the time. That is just about random, so expect price to continue the existing trend direction about half the time. With a frequency rank of 5, the opening black marubozu is a plentiful candlestick, meaning it appears often in a historical price series.

The opening black marubozu candlestick performs best in a bear market after an upward breakout. Under those conditions, it posts an average rise of 4.63% ten days after the breakout, ranking 37 out of 103 candles, where 1 is best. An outstanding performer would move 6% to 9% during those 10 days, so the opening black marubozu is well behind the pack. However, in a bull market after an upward breakout, price reaches its measure rule target 75% of the time, which is a good score.

lack Marubozu Candlestick: Three Trading Tidbits

If you want a few bones from my Encyclopedia of candlestick charts book, here are three to chew on. The pages refer to the book where the tips appear.

1. Opening black marubozu candles that appear within a third of the yearly low perform best — page 531.
2. Opening black marubozu within a third of the yearly low frequently act as continuations — page 533.
3. If price breaks out below the 50-trading day exponential moving average from an opening black marubozu candle, price tends to outperform — page 534.

Opening Black Marubozu Candlestick: Example

The chart shows three opening black marubozu candlesticks on the daily chart. The first one, A, occurs in a downtrend and the breakout — when price closes below the candle’s lower shadow — is downward. It acts as a continuation candle since the trend drops leading to the candlestick and the breakout is also downward.

Candle B begins a new downtrend when it breaks out lower from a congestion area — a peak — where price moved horizontally for a week. This opening black marubozu also breaks out downward.

The last opening black marubozu on the chart appears at C. This one occurs in an uptrend and it looks as if it signals a change in direction, but it doesn’t. Price breaks out upward when it closes higher the next day, above the top of the opening black marubozu candlestick. Since the trend before and after the candle is upward, this opening black marubozu also acts as a continuation candle.

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