Marubozu may sound like voodoo magic. Luckily, Marubozu is not voodoo and no one will cast a wicked spell on you. This term means that the real bodies do not have shadows at all. When a Marubozu forms, the high and low are similar to the opening and closing prices. The diagram below will show you the two different kinds of Marubozu.
The white Marubozu will show a long body without shadows. This means the open price is equivalent to the closing price. It also means that the highs and lows are also equal.
When you see this candle, this means there is bullishness in the market as buyer take command of the entire season. This is also the first step of a continuing bullish trend or a pattern of bullish reversal.
The black Marubozu will show a long bodied filled candle without shadows. This indicates that the opening price is equivalent to the high while the closing price is equivalent to the low.
There is a bearish mood at the market if a black Marubozu appears showing that sellers are taking command. This is also an indication of continuing bearishness or a bearish reversal.
The Spinning Tops Pattern
Spinning tops are characterized by candlesticks with small real bodies, long upper shadow, and long lower shadow. Real body color is not really important. This pattern means that buyers and sellers are reluctant to decide.
Hollow or filled, the small real bodies indicate little activity from open to close. The upper and lower shadows show the struggle between buyers and seller. However, no one can really gain the top position.
The prices can move higher and lower for a time even if the opening and closing prices shows insignificant changes. There is essentially a standoff between buyers and sellers because no one is gaining.
When you spot a spinning top during an upswing, it could mean that there is a dearth of buyers. A reversal in that direction is likely to happen.
When a spinning top emerges on a downswing, sellers are lacking and you should watch out for a reversal in the other direction which could occur soon.
The Doji Candlestick Pattern
Doji sticks have the same open and close price. Obviously in fluctuating currency markets, identical open and close prices may be rare, but if they are close enough then the candlestick can be said to be a Doji.
A Long-Legged Doji has long shadows protruding from it, indicating that there is considerable fluctuation on both sides of the open price, during the course of the trading period. Ultimately the period ends with the close price retracting back to the open price. It is a good signal of market indecision.
A Dragonfly Doji has only one long shadow, on the lower end of the open and close price. This indicates that all price activity during the trading period is on the lower side of the open price, but by the end of the trading period the price has moved back up to the open price. It is a good signal of a bearish trend reversal, i.e. price should now move upwards.
A Gravestone Doji is the opposite of a Dragonfly and again has one long shadow, to the high side of the open and close price. It indicates that during the price period all price activity is at the upper end, but that the price retracts back to open price by the end of the trading period. It is a good signal of a bullish trend reversal, i.e. price should now move downwards.
A 4-Price Doji is a rare event, in that for the prescribed trading period, the open, close, high and low price points are the same. Such an event is rare in currency trading and normally only happens when trading is suspended.
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