Mat hold candlestick pattern guidelines

The Mat Hold Candlestick Pattern is a form of candle that appears on charts. The pattern is constructed with 5 successive Japanese candlesticks. The Mat Hold Candlestick Pattern is interpreted by professionals as a continuation sign of the current trend. There are two types of this pattern: bullish mat hold candlestick pattern and bearish mat hold candlestick pattern. In this course we will explain this pattern in detail in order to trade it rightly.

Mat hold candlestick pattern

What is Mat hold candlestick pattern ?

Mat hold candlestick Pattern is a technical analysis term that describes the formation of 5 candles indicating the continuation of a prior move. In other words, those 5-candlesticks appear in a trend to indicate that the prices will probably continue moving in the same direction. Analysts and investors use this pattern to predict to what extent the trend will continue. However, Professional traders believe that if this pattern appears in a chart, the momentum will stay stable and the current trend will continue. The mat hold candlestick pattern can either be bearish or bullish. In both ways, the 1st and 5th candles are large candles that go in the same direction. However, the 2nd, 3rd, and 4th candles are very small and they tend to follow each other. Furthermore, the pattern begins either with a profitable or a fruitless trading day (Depending on the trend).

Bullish mat hold pattern example

The Bullish mat hold Candlestick Pattern consists of 5-candlesticks, the ideal case is as follows:

  • The 1st Candlestick: A large bullish candle where the open and close are far from each other, with a little shadow at both ends.
  • The 2nd, 3rd, and 4th Candlesticks: Small bearish candles where the open and close are near each other, with or without shadows at both ends.
  • However, the 2nd candle opens and closes higher than the 1st
  • The 3rd candle opens at the same closing price as the 2nd candle and closes even lower.
  • The 4th candle opens at the same closing price as the 3rd candle and closes lower
  • Then, the 5th Candlestick: A large bullish candle that opens at the same open price as the previous candle (the 4th) but closes much higher than all the previous candles, with a small shadow at both ends of course.
Mat hold candlestick pattern

To sum up, the bullish mat hold pattern is simply a large upward candle followed by 3 downward candles and a 5th larger upward candle.

As Follows, an example of a spotted Bullish mat hold pattern on EURUSD.

Bullish mat hold candlestick pattern

Bearish MAT hold pattern example

The Bearish Mat Hold candlestick Pattern consists of 5-candlesticks; the ideal case is as follows:

  • The 1st Candlestick: A large Bearish candle where the open and close are far from each other, with a little shadow at both ends.
  • The 2nd, 3rd, and 4th Candlesticks: Small Bullish candles where the open and close are near each other, with or without shadows at both ends.
  • However, the 2nd candle opens and closes lower than the 1st
  • The 3rd candle opens at the same closing price as the 2nd candle and closes higher.
  • The 4th candle opens at the same closing price as the 3rd candle and closes higher again.
  • Then, the 5th Candlestick: A large bearish candle that opens at the same open price as the previous candle (the 4th) but closes much lower than all the previous candles, with a small shadow at both ends of course. 
Bearish mat hold candlestick pattern

To sum up, the Bearish Mat Hold Pattern is simply a large Downward candle followed by 3 upward candles and a 5th larger downward candle.

As Follows, an example of a spotted Bearish Mat Hold Pattern on EURUSD.

Example

How to trade using mat hold pattern ?

The Pattern could appear during a bullish or a bearish trend, and as it is a continuation pattern, this means that you’re going to enter or exit the market during the current trend.

  • Trading using the Bullish Mat Hold Pattern

Trading using the mat hold Candlesticks means that you’re going to accede to the current trend. It is kind of risky because you have no idea how far the trend is going to continue. However, once this pattern appears in an uptend, you should look for the support and resistance levels so you may choose the optimal entry point, and then decide if you want to enter the market or not. Once you’ve entered the market, you can use the R/R ratio (Risk to reward ratio) to detect the optimal exit point.

Note that once the pattern has appeared on a chart, no confirmation is needed.

How to trade hold mat
  • Trading using the Bearish Mat Hold Pattern

The bearish mat hold pattern is the opposite of a bullish mat hold pattern, it appears in a downtrend. Once the Bearish pattern has appeared it is an indication that the downtrend will continue. In this case, the trader faces 2 choices :

  • If he owns the asset: a stop-loss order should be put immediately at the current market price to avoid any more damage.
  • If he does not own the asset: wait for the downtrend to end, He can use a technical indicator to detect the end of the trend, preferably a consolidation indicator or the KDJ trading strategy. Once the trend has ended, the investor can enter the market if the conditions are favorable.
Bearish Trading resume

Advantage and disadvantage of this pattern

Advantages

  • Easy to understand.
  • Accurate and reliable.
  • Works well with complementary technical indicators.

Disadvantages

  • Extremely rare to appear.
  • Rarely appears in its perfect form.
  • Hard to detect.

Conclusion 

The mat hold candlesticks pattern is a useful combination of candles that indicates the continuation of the current trend. It can appear in a bullish trend or a bearish trend. However, this pattern Doesn’t need any confirmation once appeared. Yet, the pattern is hard to detect and hardly appears.