Trading Strategy

Marubozu | Open High Low Close Trading Strategy

OHLC Trading STRATEGY, bullish and bearish marubozu candlesticks

As per my trading experience, Intraday Trading Strategies are not simple. They can provide you unlimited profits if applied correctly and at the right time. A day trading strategy based on (Open, High, Low & Close) is very popular among the trader’s community and its accuracy is 80% (Approx). Intraday Traders love to use this trading strategy as it helps to make quick money.

Let’s understand one of the best Intraday trading strategy.

  Bullish Marubozu & Bearish Marubozu Trading Strategy.

The word marubozu is a Japanese word which means “bald head” or “shaved head” or “shaven head” or “shaven bottom”. It doesn’t have an upper and lower shadow (upper and lower stalls).

The Marubozu are of two types

  • Bullish Marubozu

  • Bearish Marubozu

Bullish Marubozu has long green body on candlestick pattern chart with no upper shadow and the buyers have control of the price throughout the day.

A bullish marubuzo indicates that there is so much buying interest in the stock that the market participants were willing to buy the stock at any level during the day. As a result, the stock price closed near its high point for the day.

Open = Low BUY

  • For Intraday trading Days Open = Days Low.

In the chart below (MARUTI), the encircled candle is a bullish marubuzo. Notice the bullish marubuzo candle does not have a visible upper and a lower shadow. The OHLC data for the candle is: Open = 6896, High = 7098, Low = 6896, Close = 7091

A trader can make “Buy” position after 5-10 minutes of the market opening. When the scrip follows the rule Days Open = Days Low.

Maruti trading Strategy

As you can see in the above chart

Day’s Open = 6896

Day’s Low = 6896

Price after 5-10 minutes after the market opening = around 6935-6957

Stop loss = Days Lows = 6896

Target = 0.5 % – 1 % Price after 5-10 minutes after the market opening.

 

Bearish Marubozu has a long red body on candlestick pattern chart with no lower shadow and the sellers have control of the price throughout the day.

A bearish marubuzo indicates that there is so much selling pressure in the stock that the market participants actually sold at every level during the day. As a result, the stock price closed near its low point of the day.

Open = High  ~ SELL

  • For Intraday trading Days Open = Days High.

In the chart below (BPCL), the encircled candle indicates the presence of a bearish marubuzo. Notice the candle does not have an upper and a lower shadow. The OHLC data for the candle is as follows:

Open = 382, High = 382, Low = 362.15, Close = 362

A trader can make Sell position after 5-10 minutes of the market opening. When the scrip follows the rule Days Open = Days Low.

BPCL Trading Strategy

As you can see in the above chart

Day’s Open = 382

Day’s High = 382

Price after 5-10 minutes after the market opening = 378.85 – 376

Stop loss = Days High = 382

Target = 0.5 % – 1 % Price after 5-10 minutes after the market opening.

Note:-

  • I personally fill that intraday strategy is more accurate than overnight strategy.
  • Minor variation between the OHLC figures leading to small upper and lower shadows is ok as long as it is within a reasonable limit.

So, follow the rules guys and you’ll be rewarded. Having said that, I request you to backtest the Bullish Marubozu & Bearish Marubozu trading strategy as per your needs and requirement. You can tweak the elements I have used and see what results it produces.

I have a lot of other things that also need to be considered and those are something that I will cover in my next post.

Bullish Marubozu & Bearish Marubozu trading strategy lets you quickly fetch some money from day trading. However, try to exit as early as possible and lock your profits.

I believe this strategy will surely help you to make money from online trading.

If you want to add some other parameters that make this strategy more profitable, then please comments below. Your views and suggestion are always welcome.

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