White Marubozu Candlestick Pattern — Explained

This post provides all the essential information on the White Marubozu candlestick pattern.

What Is The White Marubozu Candlestick Pattern

White Marubozu is one of the strongest bullish reversal candlestick patterns. It appears as a long green candle with no or minimal shadows, indicating that the price opened at its lowest and closed near its highest.

This pattern suggests buyers controlled the price from open to close, often leading to continued bullish momentum. This pattern is often observed following a downtrend, indicating potential bullish momentum.

The presence of the White Marubozu at a support level can be a significant signal for traders, suggesting a strong buying interest and a possible trend reversal.

The White Marubozu pattern is essentially the opposite of the Black Marubozu candlestick pattern.

Identify The White Marubozu Candlestick Pattern

Identifying the white marubozu candlestick is easy. It is a single bullish reversal candlestick pattern.

To identify the White Marubozu Candlestick Pattern, consider the following points:

1. Big Body Candle: Look for a candlestick with a significantly big green body.
2. Small Wick or No Wick: Check that the candle has small or no upper and lower wicks.
3. One Bullish Candle in Downtrend: Look for a bullish candle that is big in a downtrend.

The candlestick pattern looks like this:

Types of White Marubozu Candlestick Patterns

It’s not necessary that you can find candlestick patterns as shown in the books or you have seen online. The candlestick pattern changes every time and has differences.

Here are some different types of White Marubozu candlesticks that I have seen:

• Small Upper Wick: In this type, the White Marubozu Candlestick has a small upper wick.
• Big Green Body: In this type, the White Marubozu Candlestick has no upper and lower wicks and only has a big green, powerful body.
• Small Lower Wick: In this type, the White Marubozu Candlestick has a small lower wick.
• Big Body + Both Wick: In this type, the White Marubozu Candlestick has both small wicks plus a big, green body.

How To Trade The White Marubozu Candlestick Pattern

Identifying the White Marubozu candlestick pattern is just the first step. To trade with this candlestick pattern successfully, you must understand how to trade this pattern correctly.

Let me explain.

Certain things make this pattern valid and one such thing is its location. The location of the candlestick pattern where it appears / forms is very important.

This means that suppose you try to trade the White Marubozu Candlestick Pattern at the top of the price chart; in this situation, it is obvious that your stop loss will be hit, and you will lose the trade.

When trading the White Marubozu candlestick pattern, we should always trade it at the bottom of an ongoing downtrend. Cause, A White Marubozu candlestick pattern forming at the bottom of the downtrend means trend reversal to the uptrend.

It looks like this:

This is about the location and trend, but you must be thinking. “When do we enter in the trade?” after spotting the candlestick pattern.

There are multiple ways to enter a trade using White Marubozu or any other candlestick patterns, and each trader has their approach.

For instance, some traders wait for the Marubozu candle’s high to be breached before entering a trade. When the price begins trading above it, they take the trade.

I prefer entering trades within the last 20 seconds before a candlestick closes. This strategy aligns with my observation that when powerful candlestick patterns appear, the following candle often moves strongly, making it challenging to enter at my desired price levels.

Now that we’ve learned when to enter a trade, what should our next step be? While it may seem like waiting for the target and earning profits is the obvious choice, it’s equally important to establish a stop-loss point to manage risk effectively.

There are two straightforward ways to set a stop loss: either place it below the swing low or the low point of a White Marubozu candlestick pattern.

You can choose whatever suits you best in that particular trade.

Now that we have learned how to identify, how to trade, and how to add stop loss, you must be ready to take trades with the White Marubozu pattern, but wait, don’t try to take trades with White Marubozu yet.

There are a few more things we should know.

You may have heard the advice not to rely solely on a pattern for trading. It’s important to complement patterns with other tools like support and resistance levels, trendlines, and indicators.

Here are a few strategies that you can consider to trade with White Marubozu Pattern.

Strategies To Trade The White Marubozu Pattern

Strategy 1: Trading the White Marubozu Pattern with Support

While trading with price action, support, and resistance play an important role. You can trade price reversal trade in these levels so easily.

We are trading White Marubozu means we are looking for an upside move in a downtrend, so we want this pattern to be formed at support levels.

How does it work:

• First of all, look for a down trend.
• Then draw support levels on your charts.
• After drawing levels, wait for the price to reach those levels.
• Next, observe what the is price doing on that support level, we want a White Marubozu candle on that level.
• After the price forms a White Marubozu candlestick pattern on the support level, take a buying position.
• Add your stop loss below the candlesticks or swing low level, and wait for either target or stop loss.

Here is the chart example:

Strategy 2: Trading the White Marubozu Pattern With Pivot Points

In this strategy, we use Pivot Points with White Marubozu candlestick. Pivot Points are just automatic support and resistance indicators, which calculate levels using math formulas.

For intraday traders, using standard pivot points on a daily time frame can be effective. These levels, calculated based on the previous day’s high, low, and close, can serve as potential support and resistance zones, aiding in entry and exit decisions.

Here’s how to trade the White Marubozu with Pivot Points:

• Turn on the Pivot Points indicator on your charts.
• Look for Pivot Points below the current price, as they often act as support.
• It’s best if the price is rising, but it’s not essential.
• Wait for the price to drop to a Pivot Point.
• Look for a White Marubozu pattern at that point, indicating rejection of that level.
• Start buying when in the last 20 seconds of the candle closing.
• Set your stop loss and profit targets and anticipate an upward movement.

Strategy 3: Trading The White Marubozu With Fibonacci

Another common method to trade with the White Marubozu candlestick involves the Fibonacci retracement tool.

The Fibonacci tool identifies levels where prices often reverse.

Different levels might work better with the White Marubozu pattern, depending on the trend’s strength. You can find more information about various Fibonacci levels.

Here’s the strategy:

• Look for the price to be rising.
• Wait for a price drop, which is inevitable.
• Use the Fibonacci tool to mark levels from the lowest to the highest point of the move.
• When the price reaches a Fibonacci level and forms a White Marubozu, that’s your cue.
• Start buying when in the last 20 seconds of the candle closing.
• Set your stop loss and profit targets, anticipating an upward trend.

Strategy 4: Trading The White Marubozu With RSI Divergences

Trading the White Marubozu candlestick with RSI Divergences differs from other strategies.

To spot a bullish RSI Divergence, look for the price to be in a downtrend, showing lower lows and lower highs.

Here’s the process:

• Identify a downtrend first.
• Note the lowest points the price reaches after each downward move.
• Simultaneously, compare these price lows with the RSI indicator.
• When the RSI shows higher lows while the price is making lower lows, you’ve identified your divergence.
• Wait for a White Marubozu to form at a new price low, coinciding with a higher low on the RSI.
• Start buying when in the last 20 seconds of the candle closing.
• Set your stop loss take profit levels, and anticipate an upward movement.

Strategy 5: Trading The White Marubozu With Moving Averages

Moving averages are effective indicators for trading trends.

The strategy here is to trade pullbacks towards the moving average during an uptrend. This means when the price is moving in an uptrend and starts to take a pullback, the Moving average works as support.

Here’s how to do it:

• Identify an uptrend where the price is above a moving average.
• Wait for the price to fall back towards the moving average.
• Look for a White Marubozu candlestick forming at the moving average.
• Start buying when in the last 20 seconds of the candle closing.
• Set your stop loss and take profit targets, anticipating a further upward move.

Conclusion

In this post, you have learned what it is White Marubozu, How to identify it, and How to trade it. Here is a pointwise summary of it:

• The White Marubozu is a single bullish reversal candlestick pattern.
• It must form in a downtrend or in pullbacks to work successfully.
• This pattern indicates a bullish reversal, suggesting a possible upward shift in the trend.
• To increase your winning chances, consider using the White Marubozu in combination with support, pullbacks, moving averages, and various other trading indicators.