How to Make a Trading Strategy With Candlestick Marubozu
Do you know Marubozu candlestick patterns? If not, please read the explanation about Marubozu here: Serial Candlestick: Marubozu. Building a trading strategy with Marubozu candle is not difficult. It can even provide potential benefits.
Marubozu candlestick patterns are usually interpreted as an indication of continuing the trend in the same direction as the price forming the Marubozu pattern. This candle can be bullish (white Marubozu) and bearish (black Marubozu), move steadily in one direction from open price to closing candle and or only leaving a very small upper and lower shadow. The consistency of movement or steady movement in one direction is an indication that the market will continue to move in the same direction.
How to create a trading strategy with Marubozu candlestick that provides potential profit based on indication of trend sustainability, you need to find the right entry level, which is able to provide minimal risk. Let’s take the example of Marubozu’s bullish trading strategy (direction, highest and lowest level, later to stay behind if trading using bearish Marubozu).
Entry level: When the candlestick pattern without shadow (top and bottom) appears in a row of candles (rarely actually), then a good entry level is waiting for the next move the correction (retracement) approaches one quarter of the Marubozu body length.
Placement SL: Level stop you can place in Marubozu low candle level earlier. For if the price dipradingkan below the low level, as a result will remove all sentiment price movements that make up Marubozu candle. This could indicate failure of signal sustainability trends provided by the candle.
Potential Profit: If a candle appears (after the appearance of marubozu) closed higher than the close level candle marubozu, stop level you can slide to the low candle level or level in the middle of Marubozu candle. The profit potential can be twice the length of the Marubozu body or the next resistance level above the Marubozu candle.
Well, illustrations or examples of ways trading with candle white Marubozu can also be applied to candle black Marubozu. You just just flipped the direction so you can get the entry level, stop level and target profit right.
Happy Trading …