A candlestick is a story of a battle between buyers (bulls) and sellers (bears) over one time period. The body shows who won by close; the wicks/shadows show how far each side pushed before being rejected.
A Marubozu is a decisive victory : one side dominated from open to close, no rejection (no shadows).
A Spinning Top is a stalemate : a small body with long shadows on both sides — both sides fought hard, nobody won.
Definition Candle anatomy (recall the pieces)
Open (O) , High (H) , Low (L) , Close (C) define every candle.Real body = the range between open and close = ∣ C − O ∣ |C-O| ∣ C − O ∣ Upper shadow = H − max ( O , C ) H - \max(O,C) H − max ( O , C ) Lower shadow = min ( O , C ) − L \min(O,C) - L min ( O , C ) − L Colour: bullish/green if C > O C>O C > O bearish/red if C < O C<O C < O
A candle with a large body and NO (or negligible) shadows : H ≈ max ( O , C ) H\approx \max(O,C) H ≈ max ( O , C ) L ≈ min ( O , C ) L\approx \min(O,C) L ≈ min ( O , C )
Bullish Marubozu : O = L O=L O = L C = H C=H C = H Bearish Marubozu : O = H O=H O = H C = L C=L C = L Marubozu is Japanese for "bald / shaved head " — no hair (no shadows).
A candle with a small real body placed near the middle, with upper and lower shadows both longer than the body . Signals indecision . Colour is nearly irrelevant here.
Intuition The logic, not the labelPrice movement = who is willing to transact at what level.
If price runs one direction and holds at the extreme into close → the winning side had no meaningful pushback → Marubozu → strong continuation of that direction.
If price runs both ways but returns to near the open → both sides exhausted, equilibrium → Spinning Top → the current trend is losing steam; a potential reversal or pause.
Notice: the same raw idea (compare body size to shadow size) generates both patterns. That's the 80/20 — master body-vs-shadow ratio and you've decoded most single candles.
Define:
B = ∣ C − O ∣ ( body ) , R = H − L ( total range ) B = |C-O| \quad(\text{body}), \qquad R = H-L \quad(\text{total range}) B = ∣ C − O ∣ ( body ) , R = H − L ( total range ) U = H − max ( O , C ) , L s = min ( O , C ) − L U = H-\max(O,C), \qquad L_s = \min(O,C)-L U = H − max ( O , C ) , L s = min ( O , C ) − L
Derivation of the identity (why the pieces must add up):
The full range is bull-rejection + body + bear-rejection:
R = U + B + L s R = U + B + L_s R = U + B + L s Why? Going from L L L H H H L s L_s L s B B B U U U R R R
Classification rules (ratios, so they work on any priced stock):
Pattern
Rule
Marubozu
B R ≳ 0.9 \dfrac{B}{R} \gtrsim 0.9 R B ≳ 0.9 U , L s ≈ 0 U,L_s \approx 0 U , L s ≈ 0
Spinning Top
B R ≲ 0.3 \dfrac{B}{R} \lesssim 0.3 R B ≲ 0.3 and U ≈ L s U \approx L_s U ≈ L s
Worked example Example 1 — Bullish MarubozuCandle: O = 100 , H = 110 , C = 110 , L = 100 O=100,\ H=110,\ C=110,\ L=100 O = 100 , H = 110 , C = 110 , L = 100
B = ∣ 110 − 100 ∣ = 10 B=|110-100|=10 B = ∣110 − 100∣ = 10 Why? body = |close−open|.R = 110 − 100 = 10 R=110-100=10 R = 110 − 100 = 10 Why? full range high−low.U = 110 − max ( 100 , 110 ) = 0 U=110-\max(100,110)=0 U = 110 − max ( 100 , 110 ) = 0 L s = min ( 100 , 110 ) − 100 = 0 L_s=\min(100,110)-100=0 L s = min ( 100 , 110 ) − 100 = 0 Why? no rejection either side.ρ = 10 / 10 = 1 \rho=10/10=1 ρ = 10/10 = 1 Bullish Marubozu . Buyers owned the whole session; expect follow-through up .
Worked example Example 2 — Spinning TopCandle: O = 204 , H = 212 , C = 206 , L = 198 O=204,\ H=212,\ C=206,\ L=198 O = 204 , H = 212 , C = 206 , L = 198
B = ∣ 206 − 204 ∣ = 2 B=|206-204|=2 B = ∣206 − 204∣ = 2 R = 212 − 198 = 14 R=212-198=14 R = 212 − 198 = 14 U = 212 − max ( 204 , 206 ) = 212 − 206 = 6 U=212-\max(204,206)=212-206=6 U = 212 − max ( 204 , 206 ) = 212 − 206 = 6 Why? bulls pushed to 212 but got shoved back to 206.L s = min ( 204 , 206 ) − 198 = 204 − 198 = 6 L_s=\min(204,206)-198=204-198=6 L s = min ( 204 , 206 ) − 198 = 204 − 198 = 6 Why? bears pushed to 198 but got shoved back up.ρ = 2 / 14 ≈ 0.14 \rho=2/14\approx0.14 ρ = 2/14 ≈ 0.14 U = L s = 6 U=L_s=6 U = L s = 6 Spinning Top . Perfect indecision; trend may pause/reverse.
Worked example Example 3 — Bearish MarubozuCandle: O = 350 , H = 350 , C = 330 , L = 330 O=350,\ H=350,\ C=330,\ L=330 O = 350 , H = 350 , C = 330 , L = 330
B = 20 B=20 B = 20 R = 20 R=20 R = 20 U = 350 − 350 = 0 U=350-350=0 U = 350 − 350 = 0 L s = 330 − 330 = 0 L_s=330-330=0 L s = 330 − 330 = 0 ρ = 1 \rho=1 ρ = 1 Colour red (C < O C<O C < O Bearish Marubozu . Sellers dominated; expect follow-through down .
Common mistake "Marubozu is always a buy/sell signal on its own."Why it feels right: a decisive candle looks powerful, so surely it commands action.
The fix: a single candle is context-dependent . A bullish Marubozu after a long uptrend can mark exhaustion/blow-off ; one breaking out of consolidation is stronger. Always read prior trend + location .
Common mistake "Spinning top = reversal, guaranteed."Why it feels right: indecision after a trend "should" flip the trend.
The fix: it signals loss of momentum / indecision , which may resolve as a pause and continuation. Wait for a confirmation candle in the next period before acting.
Common mistake "A small red body with tiny shadows is a spinning top."Why it feels right: the body is small, which we associate with indecision.
The fix: spinning top requires long shadows on BOTH sides (U , L s > B U,L_s > B U , L s > B Doji-like/low-volatility candle, not a spinning top.
Common mistake Judging body size in ₹ instead of ratio.Why it feels right: a "big" 20-point body sounds decisive.
The fix: use ρ = B / R \rho=B/R ρ = B / R
Recall Flip to test yourself
Formula for body dominance? → ρ = ∣ C − O ∣ / ( H − L ) \rho = |C-O|/(H-L) ρ = ∣ C − O ∣/ ( H − L )
Bullish Marubozu OHLC relation? → O = L , C = H O=L,\ C=H O = L , C = H
What makes a spinning top vs a marubozu? → shadow-to-body ratio (long balanced shadows vs none).
What does a spinning top signal? → indecision / possible pause or reversal, needs confirmation.
Recall Feynman: explain to a 12-year-oldImagine a tug-of-war in one minute.
If the red team drags everyone all the way to their side and the rope never comes back — that's a Marubozu , a total win.
If both teams pull hard, the flag goes way left, then way right, but ends up back in the middle — that's a Spinning Top : nobody won, everyone's tired. After a tie, the next round could go either way, so you wait and watch .
"Bald Marubozu, Dizzy Top."
Bald = no hair = no shadows = Marubozu (decisive).Dizzy Top = spinning = long shadows both ways = indecision.
#flashcards/stock-market
What is the formula for body dominance ρ of a candle? ρ = ∣ C − O ∣ H − L \rho = \dfrac{|C-O|}{H-L} ρ = H − L ∣ C − O ∣ , ranging 0 to 1.
Which OHLC condition defines a bullish Marubozu? Open = Low and Close = High (opened at low, closed at high, no shadows).
Which OHLC condition defines a bearish Marubozu? Open = High and Close = Low (opened at high, closed at low).
What does a Marubozu signal? Decisive one-sided control → likely continuation in that direction.
What are the two defining features of a spinning top? Small real body PLUS long upper and lower shadows (both longer than the body).
What does a spinning top signal? Indecision / stalemate → possible pause or reversal; needs a confirmation candle.
Why use a ratio B/R instead of raw body size? It is scale-free, so it works across cheap and expensive stocks regardless of price level.
Range identity linking shadows and body? R = U + B + L s R = U + B + L_s R = U + B + L s (upper shadow + body + lower shadow = high − low).
Why isn't a small body with tiny shadows a spinning top? Spinning top needs long shadows on BOTH sides; tiny shadows = Doji-like/low volatility instead.
Why must you check trend/location before trading a Marubozu? The same candle can mean breakout strength or trend exhaustion depending on where it appears.
rho ~ 0.3 both shadows big
Decisive victory, strong continuation
Stalemate, indecision, possible reversal
Bullish O=L C=H / Bearish O=H C=L
Intuition Hinglish mein samjhoDekho, har candle ek chhoti si ladai hai buyers (bulls) aur sellers (bears) ke beech. Candle ka body batata hai kaun jeeta close hone tak, aur shadow/wick batata hai dono ne kitna push kiya phir reject ho gaye. Bas yahi core idea hai — baaki sab isi se nikalta hai.
Marubozu ka matlab hai ekdum "gale ka faisla". Jaise bullish Marubozu me open bilkul low pe hota hai aur close bilkul high pe — koi shadow nahi. Iska matlab buyers ne poore time control rakha, koi rejection nahi. Isi tarah bearish Marubozu me sellers ka raj. Isse aage usi direction me continuation ki ummeed hoti hai.
Spinning Top ekdum ulta feel deta hai — chhota sa body beech me, aur upar-neeche dono taraf lambi shadows. Matlab dono side ne bahut push kiya lekin price wapas beech me aa gayi. Yani indecision , koi nahi jeeta. Iske baad trend ruk sakta hai ya palat sakta hai, isliye turant trade mat karo — agli candle ka confirmation wait karo.
Ek important trick: body ko rupees me mat naapo, ratio ρ = ∣ C − O ∣ / ( H − L ) \rho = |C-O|/(H-L) ρ = ∣ C − O ∣/ ( H − L ) ρ ≈ 1 \rho \approx 1 ρ ≈ 1 ρ \rho ρ
