Srading.com

Menu
  • Home
  • Markets
    • Forex
    • Stock
  • Fundamental Analysis
    • Economics
    • Money & Banking
  • Technical Analysis
    • Drawing Tools
    • Chart Patterns
  • Tools
    • Online Charts
    • Economic Calendar
    • Interest Rate Today (Live Widget)
    • Forex Market Hours
    • Currency Indexes Chart
    • National Holiday Calendar
    • CoT Chart
    • Quotes

RISK WARNING: Trding financial assets come with a high risk of losing money. So, everything you read on this website is for educational purposes or personal opinions only

Read our DISCLAIMER
Home
Technical Analysis
Chart Patterns
Belt Hold Candlestick Patterns (How to Trade & Examples)
Chart Patterns

Belt Hold Candlestick Patterns (How to Trade & Examples)

September 5, 2022 Zafari

Belt hold candlestick patterns are single candle reversal structures. It is divided into bullish and bearish versions.

belt hold candlestick patterns

A bullish belt hold candlestick pattern is a tall green candle that continues rising after the opening price. It forms at the bottom or end of a bullish correction pattern. Technically, it should not have a low shadow. However, a tiny low shadow is accepted.

A bearish belt hold candlestick pattern is a tall red candle that forms at the top or end of a correction wave/trend. The price continues falling after the start of the candle. Technically, a bearish belt hold candle should not have an upper shadow. However, a tiny upper shadow is accepted.

Since these patterns are single candle structures, they need strong supporting signals to reverse the trend.

This post elaborates on how to trade belt hold patterns and gives some examples.

How to Trade Belt Hold Candlestick Patterns?

Caution is required before placing a trade after a this pattern. 

Here are factors to consider when you discover a belt hold pattern:

  1. There should be a trend (uptrend before bearish and downtrend before a bullish belt hold candle). Or, it should appear at the end of a correction (bullish correction before a bullish hold belt and a bearish correction pattern before a bearish hold belt).
  2. A taller “belt hold candle” means more strength. So, longer is better. 
  3. Wait till the closure of the candle after a belt hold pattern to confirm the reversal. It is crucial because it is only one candle. 
  4. Combine the hold belt line with other technical analysis tools such as Fibonacci Tools and patterns.
  5. Check the economic calendar for the confirmation of the belt hold candle. Moreover, don’t forget news and fundamental analysis. 
  6. Put your stop loss at the start of this pattern. Or, close your long position after confirmation of a bearish belt hold candlestick and your short position after the bullish version. 

More supporting signals lead to more success rate for the belt hold pattern.

Examples of Belt Hold Candlestick Patterns

There are times that a candlestick pattern works and times that do not. Some patterns’ success rate is higher than others.

And, the success rate of belt hold patterns is lower compared to some others, such as engulfing patterns and stars.

Thus, I have brought you examples that did work and that did not work.

Bullish Belt Hold Candlestick Example

On the 20 December of 2021, the S&P 500 completed a bullish belt hold pattern. It formed after a pullback.

Bullish Belt Hold Candlestick Pattern
S&P 500 chart by TradingView

This green belt hold candle is tall. And its height is an indication of serious buyers.

The opening price of the above belt hold pattern is exactly at the 0.618 Fibonacci retracement level. This level is one of the golden levels and is considered very powerful.

As mentioned earlier, it is better to wait for the closing price of the next candle. In this chart, the next candle is a long-legged doji.

Buying after the doji is a good entry point. Under the belt hold candle is a good place to put a stop loss or close long positions.

Bearish Belt Hold Candlestick Example

On 04 August 2005, the S&P 500 completed a bearish belt hold pattern.

Here is the chart.

S&P 500 chart by TradingView

This pattern has a tiny upper shadow, which is accepted. It formed after a “bearish tweezers” which itself predicts the reversal of the trend from upward to downward and created a support line. This support line is a strong wall for bulls and confirms that the belt hold candle pattern is right.

Furthermore, the RSI indicator did not follow the price chart weeks ahead of this pattern. Consider it as another supporting signal.

When the next candle closed as a bearish, it was time to sell or close the long open position, if existed.

Finally, the stop loss should be put above the pattern.

Examples of Failed Belt Hold Candle

On 19 September 2018, Bank of America Corporation made a perfect bullish belt hold pattern. However, it failed.

Failed bullish belt hold candlestick
Bank of America chart by TradingView

It was perfect technically because the candle itself opened and started rising closing near the top, which is a perfect “belt hold candle” by definition. Moreover, it formed at the end of a correction wave/trend. Furthermore, the second and third candles earlier made a resistance area.

However, the next candle after the belt hold pattern was red, and the price could not rise. This pattern is an example that traders should wait for confirmation before placing a trade after the belt hold candle.

Final Thoughts

Belt hold candles are reversal candlestick patterns but not potent. You need powerful supporting signals to trade it. And, don’t forget a stop loss.

Share
Tweet
Linkedin
Pinterest
Reddit
Email
Prev Article
Next Article
Tags:Forex Pattern Stocks Technical Analysis

Related Articles

Shooting Star Candlestick Pattern (How to Trade & Examples)
The Shooting Star Candlestick Pattern is a single reversal candlestick …

Shooting Star Candlestick Pattern (How to Trade & Examples)

6 Popular Continuation Patterns & How to Trade
Continuation patterns express periods during which the price chart needs …

6 Popular Continuation Patterns & How to Trade

Rounding Bottom Pattern: Trading Strategy and Examples
A rounding bottom pattern is a reversal bullish chart structure …

Rounding Bottom Pattern: Trading Strategy and Examples

Three White Soldiers Candlestick Pattern (How to Trade & Example)
The “three white soldiers” is a bullish reversal candlestick pattern. …

Three White Soldiers Candlestick Pattern (How to Trade & Example)

Three Black Crows Pattern (How to Trade & Examples)
The “three black crows” is a bearish candlestick pattern having …

Three Black Crows Pattern (How to Trade & Examples)

Hanging Man Candlestick Pattern (How to Trade and Examples)
Hanging man is a single bearish reversal candlestick pattern. It …

Hanging Man Candlestick Pattern (How to Trade and Examples)

About The Author

Zafari

Zafari is a professional trader and has been in the financial market since 2014. He has a bachelor of public economics and an MBA. For some reason, he does not show his face. And he loves you all!

Leave a Reply Cancel Reply

Srading.com

QUICK LINKS

  • About
  • Cookies Policy
  • Terms & Conditions
  • Disclaimer
  • Privacy Policy
  • Contact Us

LATEST POSTS

  • Currency Correlation Explained in Simple Words
  • Intermarket Analysis Guide for Beginners
  • Elliott Wave Theory Guide for Beginners
  • Top Continuation Candlestick Patterns
  • Top Reversal Candlestick Patterns

FOLLOW US ON SOCIAL MEDIA

  • Facebook
  • Twitter
  • LinkedIn
  • Instagram
  • Pinterest
  • Telegram
  • Reddit
  • YouTube

Trading financial assets are risky. Everything you read on this website is just for educational purposes or personal opinions only. Read our DISCLAIMER!

Copyright © 2023 Srading.com

Ad Blocker Detected

Our website is made possible by displaying online advertisements to our visitors. Please consider supporting us by disabling your ad blocker.

Refresh
We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By continuing this website or clicking “Accept”, you consent to the use of ALL the cookies.
Do not sell my personal information.
Cookie SettingsAccept
Cookies Policy
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
CookieDurationDescription
cookielawinfo-checkbox-analytics11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checkbox-functional11 monthsThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checkbox-necessary11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-others11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-performance11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy11 monthsThe cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytics
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
Others
Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet.
SAVE & ACCEPT