Bullish Closing Marubozu Candlestick Pattern

The bullish closing marubozu, also known as the white closing marubozu, is a Japanese candlestick pattern that makes  $20.00, $4.60, and $30.00 in the crypto, forex, and stock markets, respectively, on average per $100 risked.

Pretty good, eh?

But did you know there’s an even more profitable way to trade this bullish marubozu by doing the opposite of traditional trading strategies?

Would you be interested?

If so, keep reading if you want to understand how to trade the bullish closing marubozu optimally on your candlestick charts.

What Are Bullish Closing Marubozu Candlestick Patterns?

Bullish Closing Marubozu Candlestick Pattern Illustration

The bullish closing marubozu is a frequently occurring candlestick pattern that supposedly alerts traders that the trend direction is up. We’ll validate this shortly, but before we do, let’s learn how to identify this single Japanese candlestick pattern.

How to Identify the Bullish Closing Marubozu Candlestick Pattern

Bullish Closing Marubozu Candlestick Pattern Identification (AAPL)

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

  • A long white body.
  • A close price very close to the high. (A tiny upper shadow)
  • The pattern doesn’t require a trend.

All we need to do is find a long bullish candle with no or tiny upper wick. The prevailing trend doesn’t matter. The bullish closing marubozu appeared on the Apple (AAPL) daily chart on October 6th, 2021. 

And while the current trend doesn’t matter for identification, I decided to test the past performance of the bullish closing marubozu in both downtrends and uptrends.

Speaking of performance, let’s learn how to trade this single candle formation.

How to Trade the Bullish Closing Marubozu Candlestick Pattern

History tells us that the bullish closing marubozu is most successful when traded as a bearish continuation in a downtrend and a bearish reversal in an uptrend. 

The data tells us that the direction is down, while conventional trading logic has this backward.

Let’s learn how to trade this pattern in the traditional matter, and then we’ll understand how data-driven, professional traders do it differently.

Bullish Closing Marubozu Bullish Continuation Trade Setup

Bullish Closing Marubozu Bullish 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?

Bullish Closing Marubozu Bearish Reversal Trade Setup

Bullish Closing Marubozu Bearish Reversal Trade Setup (NFLX)

We can see the bullish closing marubozu on the Netflix (NFLX) daily chart on July 26th, 2019.

A data-driven trader will enter short at the break of the close, setting a stop loss below the high of the closing marubozu signal. 

In the above example, we would enter the next day, turning a profit on the trade.

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

Using the following rules, I backtested the bullish 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.

Bullish Closing Marubozu Reversal Backtest Results

cryptoforexstock
pattern_namebullish closing marubozubullish closing marubozubullish closing marubozu
pattern_categorybullish reversalbullish reversalbullish reversal
pattern_bars111
required_trendnonenonenone
traded_asbearish continuationbearish continuationbearish continuation
stop_bar_typehighhighhigh
entry_bar_typeclosecloseclose
risk_reward555
timeframe2015-20212010-20212000-2021
bar_perioddailydailydaily
total_tickers39513516952
pattern_tickers23412796421
patterns7713121557458971
trades682897135412269
confirm_perc0.890.80.9
wins272345628119893
losses410551507292376
win_perc0.3990.470.291
avg_win_bars0.140.10.39
avg_loss_bars0.080.130.14
cons_wins173234199
cons_losses236141
edge1.3951.820.745
cryptoforexstock
pattern_namebullish closing marubozubullish closing marubozubullish closing marubozu
pattern_categorybullish continuationbullish continuationbullish continuation
pattern_bars111
required_trendnonenonenone
traded_asbearish reversalbearish reversalbearish reversal
stop_bar_typehighhighhigh
entry_bar_typeclosecloseclose
risk_reward555
timeframe2015-20212010-20212000-2021
bar_perioddailydailydaily
total_tickers39513516952
pattern_tickers22512765968
patterns10988248417808060
trades10182206960738191
confirm_perc0.930.830.91
wins3778109412203435
losses640497548534756
win_perc0.3710.5290.276
avg_win_bars0.180.140.39
avg_loss_bars0.10.160.13
cons_wins61571247
cons_losses597260
edge1.2252.1750.66

Bullish Closing Marubozu Bullish Continuation Backtest Results

cryptoforexstock
pattern_namebullish closing marubozubullish closing marubozubullish closing marubozu
pattern_categorybullish continuationbullish continuationbullish continuation
pattern_bars111
required_trendnonenonenone
traded_asbullish continuationbullish continuationbullish continuation
stop_bar_typelowlowlow
entry_bar_typehighhighhigh
risk_reward525
timeframe2015-20212010-20212000-2021
bar_perioddailydailydaily
total_tickers39513516952
pattern_tickers22512765968
patterns6406117158390841
trades441777916310959
confirm_perc0.690.670.8
wins10662484265904
losses335153074245055
win_perc0.2410.3190.212
avg_win_bars18.9818.8837.16
avg_loss_bars9.6212.812.38
cons_wins385
cons_losses239747
edge0.445-0.0420.27
cryptoforexstock
pattern_namebullish closing marubozubullish closing marubozubullish closing marubozu
pattern_categorybullish reversalbullish reversalbullish reversal
pattern_bars111
required_trendnonenonenone
traded_asbearish continuationbearish continuationbearish continuation
stop_bar_typehighhighhigh
entry_bar_typelowlowlow
risk_reward355
timeframe2015-20212010-20212000-2021
bar_perioddailydailydaily
total_tickers39513516952
pattern_tickers23412796421
patterns612195069364693
trades216230788134553
confirm_perc0.350.320.37
wins342478616805
losses182026002117748
win_perc0.1580.1550.125
avg_win_bars22.9931.5427.31
avg_loss_bars8.77.689.26
cons_wins83330
cons_losses187257
edge-0.366-0.065-0.255

Bullish Closing Marubozu Mean Reversion Backtest Results

cryptoforexstock
pattern_namebullish closing marubozubullish closing marubozubullish closing marubozu
pattern_categorybullish continuationbullish continuationbullish continuation
pattern_bars111
required_trendnonenonenone
traded_asbullish mean reversionbullish mean reversionbullish mean reversion
stop_bar_typeatratratr
entry_bar_typepattern_lowpattern_lowpattern_low
risk_reward555
timeframe2015-20212010-20212000-2021
bar_perioddailydailydaily
total_tickers39513516952
pattern_tickers22512765968
patterns6768150377543074
trades214031652168546
confirm_perc0.320.210.31
wins588545638189
losses155226196130357
win_perc0.2750.1720.227
avg_win_bars35.9464.0742.54
avg_loss_bars16.8124.4414.37
cons_wins347
cons_losses144542
edge0.6550.030.365
cryptoforexstock
pattern_namebullish closing marubozubullish closing marubozubullish closing marubozu
pattern_categorybullish continuationbullish continuationbullish continuation
pattern_bars111
required_trendnonenonenone
traded_asbearish mean reversionbearish mean reversionbearish mean reversion
stop_bar_typeatratratr
entry_bar_typepattern_highpattern_highpattern_high
risk_reward111
timeframe2015-20212010-20212000-2021
bar_perioddailydailydaily
total_tickers39513516952
pattern_tickers22512765968
patterns9252178755666283
trades537984700422684
confirm_perc0.580.470.63
wins274155473231505
losses263829227191179
win_perc0.510.6550.548
avg_win_bars4.557.914.62
avg_loss_bars4.5210.975.62
cons_wins34121140
cons_losses7810
edge0.020.3150.098

Analyzing the historical data, it appears as though a large bullish marubozu bar typically leads to increased volatility and a potential pivot point.

I derive this from the data by seeing that the bearish reversals and bearish continuations both have an optimal risk-reward ratio of 5:1. Additionally, both sides of the mean reversion trade strategy are profitable.

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.

Bearish Closing Marubozu vs. Bullish Closing Marubozu

The bearish closing marubozu is almost precisely the same as its bullish brother. The bearish pattern has a large black candle with little to no lower wick, while the bullish closing, as we just saw, is a large bullish candle with little to no upper wick.

Bullish Marubozu vs. Bullish Closing Marubozu

The bullish marubozu candlestick pattern is almost identical to the bullish closing marubozu. Each pattern has a single large real body, but the bullish marubozu requires little to no upper and lower wicks, while the bullish closing marubozu requires little to no lower shadow.

The Bottom Line

The bottom line is the bullish or white closing marubozu pattern frequently occurs due to being a single candlestick pattern. Most traditional trading wisdom states this pattern is bullish, but that goes against history.

The data shows that professional traders should bet that this marubozu candle is best traded as a continuation pattern in a bear market or as a bearish reversal pattern in a bull market.

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