What Is Double Maru in Forex?
Double Maru—often referred to as Dabel Maru—is a price action trading technique that originated from Southeast Asian trading communities, particularly in Malaysia and Indonesia[reference:0]. The name "Maru" is derived from the Marubozu candlestick pattern, which is a candle with little or no wick, indicating strong directional momentum[reference:1]. "Double Maru" refers to a specific formation involving two Marubozu candles that signal a potential shift in market control between buyers and sellers[reference:2].
The Double Maru technique is a simplified application of supply and demand concepts[reference:3][reference:4]. Rather than drawing complex supply and demand zones, traders using this method look for a distinct price structure that indicates where large institutional orders (often referred to as "smarts money") have been placed. The technique is designed to help traders identify high-probability reversal areas with a favourable risk-reward ratio[reference:5].
The Bank for International Settlements (BIS) Triennial Central Bank Survey highlights that price action and supply-demand strategies remain popular among retail and institutional traders alike. While the Double Maru technique is not formally recognized in mainstream technical analysis literature, it has gained a following among traders who prefer mechanical, rule-based approaches to trading.
How Double Maru Works
The Double Maru technique operates on the principle that price moves in waves and that significant market moves are often followed by a retracement to a key level before the next impulse. The technique uses a specific price structure to identify where this retracement is likely to end and where the next move will begin.
The Underlying Logic
At its core, Double Maru is about identifying areas of high liquidity where large orders have been executed. The two Marubozu candles represent a period of strong directional momentum, often driven by institutional activity[reference:6]. After this move, price typically retraces to a level where these institutions may have placed pending orders (such as stop-losses or limit orders). The technique aims to enter trades in the direction of the original momentum when price returns to this key area.
The Double Maru Structure
A classic Double Maru pattern consists of:
- First Maru (1st Maru): A strong Marubozu candle that signals the start of a directional move.
- Second Maru (2nd Maru): A second Marubozu candle that confirms the momentum and extends the move.
- Significant Drop: A sharp retracement or pullback that follows the two Marubozu candles[reference:7].
- Clean Break: A clear price break that signals the end of the retracement and the resumption of the original trend[reference:8].
The Four Key Elements of Double Maru
The Double Maru technique is built upon four essential components that must be present for a valid setup[reference:11][reference:12]. Understanding each element is crucial for accurate pattern identification and trade execution.
| Element | Description | Role in the Pattern |
|---|---|---|
| 1st Maru | A strong Marubozu candle (bullish or bearish) with little or no wick | Initiates the directional move and establishes the trend |
| 2nd Maru | A second Marubozu candle that continues the momentum | Confirms the strength of the move and extends the trend |
| Significant Drop | A sharp pullback or retracement following the two Marubozu candles | Creates the key level where price is expected to return; indicates where large orders were placed |
| Clean Break | A clear price break that signals the end of the retracement | Provides the entry trigger; confirms that the retracement is over and the trend is resuming |
Variations: Double Maru with Doji
A common variation of the Double Maru pattern includes a Doji candle appearing between the 1st Maru and 2nd Maru[reference:13][reference:14]. This Doji represents indecision in the market and can strengthen the signal when price later returns to the area of the 2nd Maru. The presence of a Doji between the two Marubozu candles is often seen as an indication of a stronger Double Maru setup.
Timeframe Flexibility
One of the advantages of the Double Maru technique is that it can be applied across multiple timeframes[reference:15][reference:16]. Whether you are a scalper using 5-minute charts or a swing trader using daily charts, the pattern can be identified and traded as long as the four key elements are present. However, higher timeframes generally provide more reliable signals due to the greater significance of the price levels involved.
The Double Maru Trading Strategy
The Double Maru trading strategy is a mechanical, rule-based approach that combines pattern recognition with price action confirmation[reference:17][reference:18]. The goal is to enter trades when price returns to the area of the 2nd Maru and displays a specific price action signal.
Step-by-Step Strategy
Step 1: Identify the Pattern
Look for the Double Maru structure on your chosen timeframe. The pattern consists of two Marubozu candles followed by a significant drop. Mark the area of the 2nd Maru's open price—this will be your key level.
Step 2: Wait for Price to Return
Allow price to retrace back to the area of the 2nd Maru's open price. This retracement is the "significant drop" element of the pattern. Patience is essential here—not every Double Maru pattern will see price return to this level.
Step 3: Look for Price Action Confirmation
When price reaches the key level, watch for one of four price action reversal patterns[reference:19][reference:20]:
- Compression Sell: Price consolidates tightly before breaking.
- CPLQ (Change of Polarity): A shift in market structure.
- Fakeout V1: A false breakout that reverses.
- Fakeout V2 (SR Flip): Support becomes resistance or vice versa.
Step 4: Enter the Trade
If price reaches the 2nd Maru area with one of the above price action signals, enter the trade in the direction of the original momentum[reference:21][reference:22]. Place your stop-loss beyond the recent swing high or low, and set a take-profit at a logical target (such as the previous high/low or a measured move).
Price Action Confirmation Patterns
The four price action patterns used in the Double Maru strategy are essential for filtering out false signals[reference:23][reference:24]:
- Compression Sell: Price forms a tight range near the key level, indicating accumulation or distribution before a breakout.
- CPLQ (Change of Polarity): A market structure shift where a previous support level becomes resistance (or vice versa).
- Fakeout V1: Price briefly breaks the key level but quickly reverses, trapping traders who entered on the breakout.
- Fakeout V2 (SR Flip): A more pronounced fakeout where the key level is breached, then flips role (support becomes resistance, etc.).
Practical Examples
To illustrate how the Double Maru technique works in practice, consider the following two scenarios.
Scenario 1: Bullish Double Maru on EUR/USD (1-Hour Chart)
On the 1-hour EUR/USD chart, you identify the following:
- 1st Maru: A strong bullish Marubozu candle closes near the high, breaking above a resistance level.
- 2nd Maru: A second bullish Marubozu candle extends the move, closing even higher.
- Significant Drop: Price retraces sharply, moving back toward the open price of the 2nd Maru.
- Price Action: At the 2nd Maru's open level, price forms a compression pattern—tight consolidation with small bodies.
Trade Execution: You enter a long position when price breaks above the compression pattern. Your stop-loss is placed below the recent swing low, and your take-profit is set at the previous high. The trade moves in your favour, capturing a significant portion of the retracement move.
Scenario 2: Bearish Double Maru on GBP/JPY (Daily Chart)
On the daily GBP/JPY chart, you spot a bearish Double Maru setup:
- 1st Maru: A strong bearish Marubozu candle breaks below a support level.
- 2nd Maru: A second bearish Marubozu candle extends the downtrend.
- Significant Drop: Price retraces upward toward the open price of the 2nd Maru.
- Price Action: At the key level, price forms a fakeout V1—it briefly breaks above the level but quickly reverses.
Trade Execution: You enter a short position when price reverses after the fakeout. Your stop-loss is placed above the fakeout high, and your take-profit is set at the previous low. The trade successfully captures the continuation of the downtrend.
Practical Checklist for Trading Double Maru
- Identify the two Marubozu candles (1st Maru and 2nd Maru) on your chart.
- Confirm a significant drop (retracement) following the two candles.
- Mark the open price of the 2nd Maru as your key level.
- Wait for price to return to the key level.
- Look for one of the four price action patterns (compression, CPLQ, fakeout V1, or fakeout V2).
- Enter the trade in the direction of the original momentum.
- Place a stop-loss beyond the recent swing high/low.
- Set a take-profit at a logical target (previous high/low, measured move, or risk-reward ratio).
- Manage the trade actively—consider trailing your stop-loss as price moves in your favour.
How to Evaluate and Compare Double Maru Setups
Not all Double Maru patterns are created equal. To increase your probability of success, you need to evaluate each setup against a set of criteria and compare it with other potential trades.
| Evaluation Criteria | What to Look For | Why It Matters |
|---|---|---|
| Candle Strength | Marubozu candles with very small or no wicks | Indicates strong momentum and conviction behind the move |
| Retracement Depth | Price retraces to the 2nd Maru's open price (50-100% of the move) | Shallow retracements may not reach the key level; deep retracements may indicate a trend change |
| Price Action Signal | One of the four reversal patterns at the key level | Provides the entry trigger and confirms the setup's validity |
| Timeframe Alignment | Higher timeframe (4H, daily) shows the same directional bias | Increases the probability of the trade working out |
| Risk-Reward Ratio | At least 1:2 or higher | Ensures that the potential profit justifies the risk taken |
| Market Context | Avoid trading during major news events or low-liquidity periods | Reduces the risk of slippage and false signals |
Decision Criteria for Different Trader Types
For Scalpers
Focus on lower timeframes (1-minute to 15-minute) and look for compression patterns at the key level. Ensure the spread is tight and execution is fast.
For Day Traders
Use 1-hour to 4-hour charts. Look for fakeout patterns and ensure the setup aligns with the broader trend on the daily chart.
For Swing Traders
Apply the technique on daily or weekly charts. The "significant drop" element is more pronounced on higher timeframes, providing more reliable signals.
For Beginners
Start with higher timeframes (4H or daily) and practice identifying the pattern on a demo account. Focus on setups with clear price action signals and avoid ambiguous patterns.
Common Misconceptions About Double Maru
Misconception 1: Double Maru is a guaranteed winning strategy
False. Like all trading strategies, Double Maru is probabilistic. No strategy guarantees wins. The technique aims to provide a high-probability setup, but losses are inevitable. Proper risk management is essential.
Misconception 2: Any two Marubozu candles form a Double Maru pattern
False. A valid Double Maru pattern requires all four elements to be present: two Marubozu candles, a significant drop, and a clean break. Simply seeing two Marubozu candles in a row does not constitute a valid setup.
Misconception 3: The strategy works the same on all timeframes
False. While the pattern can be identified on any timeframe, the reliability of the signal increases with higher timeframes. Lower timeframes are more prone to noise and false signals.
Misconception 4: You don't need price action confirmation
False. The Double Maru strategy explicitly requires one of the four price action patterns at the key level before entering a trade[reference:26]. Entering without this confirmation significantly reduces the probability of success.
Misconception 5: Double Maru is the same as a double bottom or double top
False. Double Maru is a specific price action pattern based on Marubozu candles and supply-demand concepts. Double bottoms and tops are classic chart patterns that are identified differently and have different implications.
Misconception 6: You can trade Double Maru without practice
False. Mastering the Double Maru technique requires significant practice in identifying the pattern and the price action signals[reference:27]. Traders are encouraged to practice on demo accounts and review historical charts to build proficiency.
Risk Controls and Best Practices
Trading the Double Maru pattern, like any forex strategy, carries inherent risks. The CFTC and NFA have published extensive investor education materials highlighting the risks of retail forex trading, including leverage, market volatility, and the importance of risk management. The following risk controls and best practices will help you manage these risks effectively.
Key Risks When Trading Double Maru
- False Signals: Not every Double Maru pattern results in a profitable trade. False signals can occur, especially in choppy or low-liquidity markets.
- Leverage Risk: Even with a good setup, leverage amplifies losses. The CFTC has set leverage limits in the US to protect retail traders, but traders should still use leverage cautiously.
- Market Volatility: Major news events or economic data releases can cause sharp price movements that invalidate the pattern or trigger stop-losses prematurely.
- Execution Risk: During volatile periods, orders may be filled at different prices than expected, affecting the profitability of the trade.
- Psychological Risk: The patience required to wait for price to return to the key level can be challenging. Impulsive entries without proper confirmation are a common pitfall.
- Over-trading: Seeing the pattern on multiple timeframes or pairs can lead to over-trading, which increases transaction costs and overall risk exposure.
Best Practices for Managing Risks
1. Use Stop-Loss Orders
Always place a stop-loss for every trade. The stop-loss should be placed beyond the recent swing high or low to give the trade room to breathe while limiting potential losses.
2. Apply Consistent Position Sizing
Risk no more than 1% to 2% of your account balance per trade. This ensures that a series of losing trades does not significantly deplete your capital.
3. Wait for Confirmation
Do not enter a trade simply because price reaches the key level. Wait for one of the four price action patterns to confirm the entry[reference:28]. Patience is a key component of this strategy.
4. Avoid Trading During High-Impact News
Check the economic calendar before entering a trade. High-impact news events can cause erratic price movements that invalidate the pattern or trigger stop-losses.
5. Keep a Trading Journal
Record every Double Maru trade, including the setup, entry, exit, and outcome. Reviewing this data helps you identify which variations of the pattern work best for you and refine your approach.
6. Practice on a Demo Account
Before trading with real money, practice identifying and trading Double Maru patterns on a demo account. This builds confidence and helps you internalize the pattern recognition process[reference:29].
Frequently Asked Questions
Q: What is the difference between Double Maru and a standard Marubozu pattern?
A standard Marubozu is a single candlestick pattern that indicates strong directional momentum. Double Maru (Dabel Maru) is a multi-candle pattern that involves two Marubozu candles followed by a retracement and a specific price action signal. Double Maru is a complete trading strategy, while a Marubozu is just a candlestick pattern[reference:30].
Q: Can Double Maru be used on any currency pair?
Yes, the Double Maru technique can be applied to any currency pair that exhibits clear price action. However, it works best on liquid pairs such as EUR/USD, GBP/USD, and USD/JPY, where the patterns are more reliable and spreads are tighter[reference:31].
Q: What is the ideal risk-reward ratio for Double Maru trades?
A minimum risk-reward ratio of 1:2 is recommended for Double Maru trades. Many traders aim for 1:3 or higher, depending on the market context and the distance to the next key level. The technique's advantage is that it can offer small risk with large reward potential[reference:32].
Q: How do I identify a "significant drop" in the Double Maru pattern?
A significant drop is a sharp pullback that occurs after the two Marubozu candles[reference:33]. It should be clearly visible on the chart—price moves back toward the open price of the 2nd Maru. The drop should be substantial enough to indicate that a key level has been tested.
Q: Is the Double Maru strategy suitable for beginners?
Yes, but with the caveat that beginners should practice extensively on a demo account before using real money[reference:34]. The strategy is mechanical and rule-based, which makes it easier to learn than discretionary methods. However, pattern recognition still requires practice.
Q: What are the four price action patterns used in the Double Maru strategy?
The four patterns are compression sell, CPLQ (Change of Polarity), fakeout V1, and fakeout V2 (SR Flip)[reference:35][reference:36]. These patterns act as entry triggers when price reaches the key level, confirming that the retracement is over and the original trend is resuming.
Q: Can Double Maru be combined with other indicators?
Yes. Some traders combine Double Maru with support and resistance levels, moving averages, or Fibonacci retracements to filter setups. However, the technique is designed to be used as a standalone price action strategy. Adding too many indicators can lead to analysis paralysis.
Q: Where can I find more resources on the Double Maru technique?
The Double Maru technique is primarily shared within online trading communities and through educational platforms in Southeast Asia. Resources can be found on trading forums, YouTube, and specialized forex education websites. The NFA and CFTC also provide general trading education that can complement your learning.