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Written and copyright © 2008-2009 by Thomas N. Bulkowski. All rights reserved.
In my book,
Encyclopedia of Candlestick Charts  , pictured on the right,
I explore the entire range of candlestick patterns from abandoned babies to windows (not exactly A to Z, but you get the idea), in both bull and bear markets, using almost 5 million candle lines
in the tests.
The book takes an in-depth look at 103 candlestick patterns and reports on behavior and rank (3 types: reversal rate, frequency, and overall performance), identification guidelines,
performance statistics (tables of general statistics, height, and volume), trading tactics (tables of statistics on reversal rates and performance indicators),
and wraps each chapter with a sample trade. I share a sliver of that information below. If you like what you read here, then you will love the book. Help support this website and buy a copy
by clicking on the above link.
The opening black marubozu candlestick is a tall, black, single candle line that has no upper shadow but does have a lower one. It appears anywhere it likes, meaning no prior price trend
is required (otherwise it would be a belt hold). It acts as a continuation pattern 52% of the time, which I consider random but it occurs often. It ranks fifth
for frequency, where 1 is the most popular out of 103 candlestick types. For performance, it is a mid range candle, ranking 58 out of 103 where 1 is best. In short, this candle has little to
offer. I consider it just another line on the price chart.
Important Results
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Theoretical performance: Continuation
Tested performance: Continuation 52% of the time
Frequency rank: 5
Overall performance rank: 58
Best percentage meeting price target: 75% (bull market, up breakout)
Best average move in 10 days: 4.63% (bear market, up breakout)
Best 10-day performance rank: 37 (bear 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.
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 Opening Black Marubozu
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Discussion
Theory matches reality found from testing: The opening black marubozu candlestick acts as a continuation of the existing trend 52% of the time. That is just about random, so expect price
to continue the existing trend direction about half the time. With a frequency rank of 5, the opening black marubozu is a plentiful candlestick, meaning it appears often in a historical price series.
The opening black marubozu candlestick performs best in a bear market after an upward breakout. Under those conditions, it posts an average rise of 4.63% ten days after the breakout,
ranking 37 out of 103 candles, where 1 is best. An outstanding performer would move 6% to 9% during those 10 days, so the opening black marubozu is well behind the pack. However, in a
bull market after an upward breakout, price reaches its measure rule target 75% of the time, which is a good score.
Identification Guidelines
| Characteristic | Discussion |
| Number of candle lines | One. |
| Price trend leading to the pattern | None. |
| Configuration | Look for a tall black candle with no upper shadow but it does have lower shadow. |
Three Trading Tidbits
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.
- Opening black marubozu candles that appear within a third of the yearly low perform best -- page 531.
- Opening black marubozu within a third of the yearly low frequently act as continuations -- page 533.
- If price breaks out below the 50-trading day exponential moving average from an opening black marubozu candle, price tends to outperform -- page 534.
Example
The chart shows three opening black marubozu candlesticks on the daily chart. The first one, A, occurs in a downtrend and the
breakout -- when price closes below the candle’s lower shadow -- is downward. It acts as a continuation candle since the trend drops leading to the candlestick
and the breakout is also downward.
Candle B begins a new downtrend when it breaks out lower from a congestion area -- a peak -- where price moved horizontally for a week.
This opening black marubozu also breaks out downward.
The last opening black marubozu on the chart appears at C. This one occurs in an uptrend and it looks as if it signals a change in direction,
but it doesn’t. Price breaks out upward when it closes higher the next day, above the top of the opening black marubozu candlestick. Since the trend before and after the
candle is upward, this opening black marubozu also acts as a continuation candle.
-- Thomas Bulkowski
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