Bearish Closing Marubozu Candlestick Pattern

The bearish closing marubozu, also known as the black closing marubozu, is a Japanese candlestick pattern that loses $12.00 and $3.40 in the crypto and stock markets, respectively, and gains $7.60 in the stock market on average per $100 risked.

Not so hot, right?

But what if I told you that this pattern is not a trend reversal signal and you can make money using data-driven trading strategies? 

Would you be interested?

If so, keep reading if you want to learn how to trade the bearish closing marubozu most profitably on your candlestick charts.

What Are Bearish Closing Marubozu Candlestick Patterns?

Bearish Closing Marubozu Candlestick Pattern Illustration

The bearish closing marubozu is supposedly a candlestick pattern that alerts traders that the bears are here to stay. We’ll find out if this is true in a few minutes, but before we do, let’s learn how to identify this single candlestick pattern.

How to Identify the Bearish Closing Marubozu Candlestick Pattern

Bearish Closing Marubozu Candlestick Pattern Identification (AAPL)

The following are the requirements for a valid bearish closing marubozu:

  • A long black body.
  • A close price very close to the low. (A tiny lower shadow)
  • The pattern doesn’t require a trend.

We see the bearish closing marubozu on the Apple (AAPL) daily chart on December 13, 2021. The current trend doesn’t matter, so we must identify a long black candle with a tiny or no lower wick.

This single candlestick pattern occurs frequently and is easy to identify, but how do we trade this pattern, and can we find a trading strategy that pays dividends.

But before we move on, you’ll notice that there’s no trend requirement for this pattern; however, I wanted to test how this single pattern works with trends.

How to Trade the Bearish Closing Marubozu Candlestick Pattern

The data shows that the bearish closing marubozu is best traded as a bullish reversal in a downtrend using an optimal risk-reward ratio of 1:5 and as a bullish continuation during an uptrend.

In other words, if you’ve been trading the bearish closing marubozu using a traditional trading strategy, you’ve likely lost money.

But don’t worry, this single bar pattern becomes quite profitable when trading using history as our guide. But before we learn how to do that, let’s understand how most traders trade this pattern.

Bearish Closing Marubozu Bearish Continuation Trade Setup

Bearish Closing Marubozu Bearish Continuation Trade Setup (GOOG)

Again, the black closing marubozu is one of the most straightforward patterns to identify. We see one long bearish bar with little to no lower wick on Google’s (GOOG) daily chart on November 22, 2021.

Traders traditionally go short at a break of the bar’s low and set a stop loss above the candle high. We see that price does continue moving in the bearish direction leading to a profitable trade.

But as I mentioned, if you traded this pattern, you’re going against what history tells us works – you’re not acting like a data-driven trader.

So how would data-driven traders make money off of this pattern?

Bearish Closing Marubozu Bullish Trade Setup

Bearish Closing Marubozu Bullish Continuation & Bullish Reversal Trade Setup (MSFT)

Does the Bearish Closing Marubozu Candlestick Pattern Work? (Backtest Results)

Using the following rules, I backtested the bearish closing marubozu candlestick patterns on the daily timeframe in the crypto, forex, and stock markets.

  • A close above the 50-day SMA constitutes an uptrend.
  • I tested risk-reward ranges from 1 to 5. 
  • The optimal risk-reward ratio is selected using profit per bar.
  • Entry and exits are discussed in the how-to trade section above.
  • Confirmation must occur within three days of the pattern signal.

Bearish Closing Marubozu Reversal Backtest Results

cryptoforexstock
pattern_namebearish closing marubozubearish closing marubozubearish closing marubozu
pattern_categorybearish reversalbearish reversalbearish reversal
pattern_bars111
required_trendnonenonenone
traded_asbearish reversalbearish reversalbearish reversal
stop_bar_typehighhighhigh
entry_bar_typelowlowlow
risk_reward122
timeframe2015-20212010-20212000-2021
bar_perioddailydailydaily
total_tickers39513516952
pattern_tickers23012295620
patterns438284839349935
trades327559552289001
confirm_perc0.750.70.83
wins14422134293307
losses183338210195694
win_perc0.440.3580.323
avg_win_bars5.712.29.43
avg_loss_bars6.378.856.7
cons_wins168163
cons_losses112719
edge-0.120.076-0.034
cryptoforexstock
pattern_namebearish closing marubozubearish closing marubozubearish closing marubozu
pattern_categorybearish reversalbearish reversalbearish reversal
pattern_bars111
required_trendnonenonenone
traded_asbearish reversalbearish reversalbearish reversal
stop_bar_typehighhighhigh
entry_bar_typeclosecloseclose
risk_reward122
timeframe2015-20212010-20212000-2021
bar_perioddailydailydaily
total_tickers39513516952
pattern_tickers23012295620
patterns437284704351042
trades343461725296590
confirm_perc0.790.730.84
wins15042188497021
losses193039841199569
win_perc0.4380.3550.327
avg_win_bars5.412.018.91
avg_loss_bars6.148.486.42
cons_wins178163
cons_losses102818
edge-0.1220.07-0.016

Bearish Closing Marubozu Bullish Continuation Backtest Results

cryptoforexstock
pattern_namebearish closing marubozubearish closing marubozubearish closing marubozu
pattern_categorybearish continuationbearish continuationbearish continuation
pattern_bars111
required_trendnonenonenone
traded_asbullish reversalbullish reversalbullish reversal
stop_bar_typelowlowlow
entry_bar_typeclosecloseclose
risk_reward555
timeframe2015-20212010-20212000-2021
bar_perioddailydailydaily
total_tickers39513516952
pattern_tickers24712776424
patterns14676257293742186
trades13378214759684378
confirm_perc0.910.830.92
wins5333118947194104
losses804595812490274
win_perc0.3990.5540.284
avg_win_bars0.240.080.32
avg_loss_bars0.140.140.13
cons_wins188310
cons_losses436935
edge1.3952.320.7
cryptoforexstock
pattern_namebearish closing marubozubearish closing marubozubearish closing marubozu
pattern_categorybearish reversalbearish reversalbearish reversal
pattern_bars111
required_trendnonenonenone
traded_asbullish continuationbullish continuationbullish continuation
stop_bar_typelowlowlow
entry_bar_typeclosecloseclose
risk_reward555
timeframe2015-20212010-20212000-2021
bar_perioddailydailydaily
total_tickers39513516952
pattern_tickers23012295620
patterns5249115888433999
trades486293941397735
confirm_perc0.930.810.92
wins163945698103938
losses322348243293797
win_perc0.3370.4860.261
avg_win_bars0.180.060.26
avg_loss_bars0.110.160.09
cons_wins84114
cons_losses243538
edge1.0251.920.565

Bearish Closing  Marubozu Mean Reversion Backtest Results

cryptoforexstock
pattern_namebearish closing marubozubearish closing marubozubearish closing marubozu
pattern_categorybearish reversalbearish reversalbearish reversal
pattern_bars111
required_trendnonenonenone
traded_asbullish mean reversionbullish mean reversionbullish mean reversion
stop_bar_typeatratratr
entry_bar_typepattern_lowpattern_lowpattern_low
risk_reward515
timeframe2015-20212010-20212000-2021
bar_perioddailydailydaily
total_tickers39513516952
pattern_tickers23012295620
patterns3418105433275162
trades207351280179393
confirm_perc0.610.490.65
wins5613103342356
losses151220247137037
win_perc0.2710.6050.236
avg_win_bars29.34.4339.88
avg_loss_bars15.116.4114.38
cons_wins5188
cons_losses152542
edge0.6250.2050.42
cryptoforexstock
pattern_namebearish closing marubozubearish closing marubozubearish closing marubozu
pattern_categorybearish reversalbearish reversalbearish reversal
pattern_bars111
required_trendnonenonenone
traded_asbearish mean reversionbearish mean reversionbearish mean reversion
stop_bar_typeatratratr
entry_bar_typepattern_highpattern_highpattern_high
risk_reward232
timeframe2015-20212010-20212000-2021
bar_perioddailydailydaily
total_tickers39513516952
pattern_tickers23012295620
patterns444895774382866
trades151223725127868
confirm_perc0.340.250.33
wins388662543413
losses11241710084455
win_perc0.2570.2790.34
avg_win_bars18.2825.2510.01
avg_loss_bars8.0214.487.31
cons_wins82234
cons_losses132921
edge-0.2260.1170.02

Similar Candlestick Patterns

Multiple candlestick patterns are often confused with the bearish closing marubozu. It’s essential to understand the differences when using candlestick pattern technical analysis.

Bullish Closing Marubozu vs. Bearish Closing Marubozu

The bullish closing marubozu is almost precisely the same as its bearish cousin. The bullish version has a large bullish candle with little to no upper wick, while the bearish closing has a sizeable bearish candle with little to no lower wick.

Bearish Marubozu vs. Bearish Closing Marubozu

The bearish marubozu is very similar to the bearish closing marubozu. Both have large bearish or black bodies, but the bearish marubozu requires little to no upper and lower wicks, while the bearish closing marubozu only requires little to no lower wick.

The Bottom Line

The bottom line is the bearish or black closing marubozu pattern is easy to identify and occurs frequently. Common trading knowledge recommends trading this pattern to the downside, a money-losing proposition based on history.

Instead, this pattern should be traded as a bullish continuation or bullish reversal, expecting this candle to act as a pivot point.

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