Mat Hold Pattern
What is a Mat Hold Pattern?
A mat hold pattern is a candlestick formation that demonstrates the continuation of a prior move.
There can be bearish or bullish mat hold patterns. A bullish pattern begins with a large vertical candle followed by a gap higher and three more modest candles that move lower. These candles must remain over the low of the primary candle. The fifth candle is a large candle that moves to the upside once more. The pattern happens inside an overall uptrend.
The bearish adaptation is something very similar, aside from candles one and five are large down endlessly candles two through four are more modest and move to the upside. These candles must remain below the high of the primary candle. The pattern finishes with a long candle to the downside, candle five. It must happen inside a downtrend.
Key Takeways
- A mat hold pattern can be bullish or bearish. The bullish pattern happens inside an uptrend and a bearish pattern happens inside a downtrend.
- The bullish variant is a large up candle, a gap higher follow by three more modest down candles, and afterward a large up candle.
- The bearish form is a large down candle, a gap lower followed by three more modest up candles, and afterward a large down candle.
Everything that the Mat Hold Pattern Says to You
At the point when the bullish mat hold pattern happens inside an uptrend it flags that the uptrend is logical continuing to upside. Traders might opt to buy close to the close of the fifth candle (large up candle) or enter a long trade on the following candle. A stop loss is commonly positioned below the low of the fifth candle.
At the point when a bearish mat hold pattern happens inside a downtrend, it demonstrates the downtrend is reasonable continuing and prices will keep on falling. Traders might opt to sell or short close to the close of the fifth or on the following candle. A stop loss on short positions is set over the high of the fifth candle.
The two renditions of the pattern are very rare. They show that the price is moving strongly in the trending bearing (candle one), and there is just minor pressure the other way (candles two through four) before the price begins moving in the trending heading once more (candle five).
Illustration of the Mat Hold Pattern
The mat hold pattern is rare. Subsequently, traders might allow for small deviations in the pattern as long as the overall reason of the pattern stays in consideration.
The following pattern in Alphabet Inc. (GOOG) gets going with a strong vertical candle in an overall uptrend. This is followed by four candles that stay over the low of the first. The bullish pattern ordinarily just has three candles that transition to the downside. The pattern is followed by a further rise to the upside, albeit in this case it is short-lived.
Notwithstanding the deviation from the ordinary - six candles rather than five — the overall pattern shows a strong price rise, a pullback, and afterward a strong flood in the trending bearing toward the finish of the pattern.
Every trader should decide whether they will allow for slight deviations in the pattern or not.
What is the Difference Between a Mat Hold and a Rising Three Pattern
A rising three pattern is practically the same besides there isn't a gap following the principal candle. This pattern additionally not extremely common.
Limitations of the Mat Hold Pattern
The mat hold pattern is elusive. It happens rarely, and the price doesn't necessarily in all cases move true to form following the pattern.
There is no profit target for the mat hold pattern. In the event that the price moves true to form, the pattern doesn't demonstrate how far the price could run. This will require another method, like trend analysis or technical indicators to decide an exit, or conceivably another candlestick pattern.
The mat hold pattern is ordinarily best utilized related to different forms of analysis, as it very well might be questionable whenever traded exclusively all alone.
