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Thomas Bulkowski’s successful investment activities allowed him to retire at age 36. He is an internationally known author and trader with 30+ years of stock market experience and widely regarded as a leading expert on chart patterns. He may be reached at

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Bulkowski's Black Marubozu

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Busted
Patterns
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Patterns
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Patterns
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Market
Industrials (^DJI):
Transports (^DJT):
Utilities (^DJU):
Nasdaq (^IXIC):
S&P500 (^GSPC):
As of 07/02/2015
17,730 -27.80 -0.2%
8,123 18.64 0.2%
561 7.55 1.4%
5,009 -3.91 -0.1%
2,077 -0.64 0.0%
YTD
-0.5%
-11.1%
-9.2%
5.8%
0.9%
Tom's Targets    Overview: 06/30/2015
18,100 or 17,300 by 07/15/2015
7,800 or 8,500 by 07/15/2015
523 or 578 by 07/15/2015
5,200 or 4,850 by 07/15/2015
2,120 or 2,030 by 07/15/2015
Wilder RSI: -3.6%

Written by and copyright © 2005-2015 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You and you alone are responsible for your investment decisions. See Privacy/Disclaimer for more information.

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

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The black marubozu candlestick, along with the other variety of marubozu candles, have been given more weight by candlestick followers than I think they deserve. The black marubozu acts as a continuation candle 53% of the time, which I consider "near random." The performance after the breakout ranks just 57 out of 103, where a rank of 1 is for the best performance. The tests show not much benefit from this candle, despite what others may claim.

Important Results for Black Marubozu's

Theoretical performance: Continuation
Tested performance: Continuation 53% of the time
Frequency rank: 30
Overall performance rank: 57
Best percentage meeting price target: 78% (bull market, up breakout)
Best average move in 10 days: 5.33% (bear market, up breakout)
Best 10-day performance rank: 24 (bull 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.

The ideal black marubozu candlestick
Black Marubozu

Black Marubozu Discussion

The black marubozu is a tall black candle with no shadows. Theory agrees with reality in that the candle acts as a continuation of the prevailing price trend, but I found that behavior is almost random: 53% of the time it acts that way. The black marubozu occurs frequently, ranking 30 where 1 is as plentiful as traffic jams during rush hour.

The best average move 10 days after the breakout is 5.33%, which is quite good. That occurs after an upward breakout in a bear market. However, the best 10 day performance rank (24) occurs during a bull market after an upward breakout. I find both of those numbers interesting given that the marubozu closes at the low for the day. Price has to push higher and breakout above the top of the candle and then continue rising to meet those gains. Perhaps this is an example of growing upward momentum after a reversal of the downtrend.

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Black Marubozu Identification Guidelines

CharacteristicDiscussion
Number of candle linesOne.
Price trend leading to the patternNone required.
ConfigurationA tall black candle with no shadows.

Three Trading Tidbits for Black Marubozu

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. Black marubozu candles within a third of the yearly low perform best -- page 506-507.
  2. Use the price trend leading to the candle to predict the likely breakout direction -- page 508.
  3. A black marubozu in an identical three crows candle pattern makes for an interesting trading setup -- page 509-510.

Black Marubozu Example

The black marubozu candlestick on the daily scale

The black marubozu candle, shown here at A, is a tall black candlestick with no shadows. This one happens in a downward price trend and price breaks out downward, too. A downward breakout occurs when price closes below the bottom of the candle, which occurs the next day in this example.

Since the closing price on the day the black marubozu forms is at the bottom of the candle, you would expect the breakout to be downward, and it is. However, upward breakouts occur 34% of the time in the 19,993 black marubozu candles I looked at.

Look for the best performance from a black marubozu when price trends downward leading to the candle. Both reversals (upward breakouts) and continuations (downward breakouts) perform better than a black marubozu in an up trend.

-- Thomas Bulkowski

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See Also

Written by and copyright © 2005-2015 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You and you alone are responsible for your investment decisions. See Privacy/Disclaimer for more information. Dyslexic's are teople poo.