A candlestick with no shadow is regarded as a strong signal of conviction by either buyers or sellers depending on whether the direction of the candle is up or down. This type of candlestick is created when a security's price action does not trade outside the range of the opening and closing prices. Generally, when looking at a candlestick chart, traders will notice a small vertical line placed at the top or bottom of each candle. This line is known as the wick, or shadow, and it represents the given day's high or low. This shadow is omitted when the open and close are equal to the high and low. Technical traders have come to call a long bodied candle with no upper or lower shadow a marubozo, which means "close-cropped" in Japanese .

When this type of candle is found in an uptrend, it is used to signal that the bulls are aggressively buying the asset and it suggests that the momentum may continue upward. The bullish marubozo candle (open equals low, high equals close) can signal a reversal when it is found at the end of a downtrend because it shows that the sentiment has changed and that the bulls are likely to continue pushing the asset higher. On the other hand, a bearish marubozo found in a downtrend (open equals high, low equals close) can signal further selling pressure, especially if found at the top of an uptrend.

For more on candlesticks, see the Art of Candlestick Charting.

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  1. Marubozo

    A type of candlestick charting formation that appears when a ...
  2. Shadow

    A small line found on a candle in a candlestick chart that is ...
  3. Bearish Belt Hold

    A candlestick pattern that forms during an upward trend. This ...
  4. Bullish Engulfing Pattern

    A chart pattern that forms when a small black candlestick is ...
  5. Bullish Belt Hold

    A trend in candlestick charting that occurs during a downward ...
  6. Evening Star

    A bearish candlestick pattern consisting of three candles that ...
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