Mat Hold Pattern
The Mat Hold pattern is the formation of a candlestick that indicates that the previous move is continuing. Mat holding patterns can be bullish or bearish. A bullish pattern begins with a large ascending candle that continues through the gap above and three smaller descending candles. These candles should be above the low of the first candle. The fifth candle is a large bullish candle again.
This pattern occurs within a general uptrend. The bearish mat holding pattern is similar to the bullish pattern, except that the first and fifth candles are larger. Candles number two, three, and four are smaller and move up. These candles should be below the high of the first candle. The pattern ends with a long descending candle, the fifth candle. This must happen in a downtrend.
Bullish Mat Hold Candlestick Pattern
The Bullish Mat Hold candlestick pattern consists of five candles. The first and fifth candles are large and bullish. The second, third, and fourth candles are smaller and bearish. Below are the conditions that suggest that a certain pattern is a bullish carpet-holding candlestick pattern.
- The first candle is high and positive, forming an uptrend.
- The next three candles are bearish, and all closed lower than the previous bar.
- The last candle is high and bullish and is trying to close above the top of the pattern. The usual interpretation is that an uptrend continues by following an uptrend.
Meaning of Bullish Mat Hold Pattern
Candlestick patterns are a special story about the state of the market they create. Traders are often very interested in knowing what is going on in the market. They forecast the future of the market by knowing the current state. They may or may not understand market movements as they do. Analysing the action of a market is still a good exercise for a trader. Analysing market action will allow them to better understand the market. They will begin to notice repetitive patterns because these patterns will eventually translate into trading strategies.
Bullish Mat Hold Pattern Analysis
Due to the positive market trend, investors and traders think that the price will continue to rise. Succeeding with this confidence, the market created the first candle of a bullish holding pattern that was positive. However, after rising for a while, the market has become overbought. Likewise, many market participants are starting to worry about the approach of a correction due to the strong development of the previous period.
As a result, many market participants attempt to exit their positions, resulting in a flood of sell orders into the market. This causes the creation of three bearish candles. In short, a bullish mat holding is the story of a rising market that makes a normal retracement before reaching new highs.
Bullish Mat Hold Pattern Examples
Following is the example of bullish mat hold patterns:
Comparison of Bullish Mat Hold and Rising Three Methods:
The rising three methods and bullish mat hold are almost the same, but they have one big difference. This important difference is that the second candle opens with a gap after the first bullish candle in a bullish hold. The second candle will run at the closing price of the previous candle in all three bullish methods. It will not run with the vacuum facing up. Here are examples through which you can observe the difference between the two.
- Rising three methods
- Bullish Mat Hold
Trade with a bullish Mat Hold
Many people familiar with the different types of candlestick patterns think that entering the market after you have signalled a candlestick pattern on the chart is reason enough to Become a successful trader. However, the process is not so easy. Bullish mat hold patterns require a bit of modification to use in the market to make a profit. The trader will have to add his conditions to ensure that he only enters the market when the time is in his favour and can get a high profit. Two powerful filters widely used by traders. They are:
- Volatility
- Seasonality
Volatility
Volatility filters are often a trader’s first priority. Instability is innate in anything that performs a certain function. This means that volatility is a very general concept that a trader can apply to a large number of markets. Sometimes a strategy or pattern can work better with higher or lower volatility. Backtesting is the best method to find out what works best in a particular market and time period. There are different types of volatility filters:
1- ADX
2- Average True Range
ADX
ADX is a trading indicator that calculates market volatility. A reading above 25 is generally considered a symbol of high volatility, and a reading below 20 indicates a fairly calm market. Usually, the ADX works with 14-period settings, but it also usually works well with 5 to 30 settings. Traders can only take trades if ADX is above 25 or below 20. This depends on whether the ADX is above 25 or below 20 and whether the model works better with low or high volatility.
Average True Range
By comparing the range of the current bar with the range of the previous bar, we can get an idea of the current volatility. The average true range indicator is best for this because it is simply the average of the last x-bar range. To see how high or low volatility is, simply compare the current bar’s range with the average of the actual range.
Seasonality
Market behavior is strongly influenced by seasonal and seasonal trends. For example, some months tend to be more bullish than others, and vice versa. Knowing these patterns helps the trader to make better decisions about entering the market. It is necessary to explore more seasonal and time-based trends. Here are some:
Time of day: Some strategies only work in the first or second half of the trading time
Weekdays: Some days of the week tend to be more bearish or bullish than others is different.
During the Month: The trader can divide the month into different parts and see which of his strategies works best.
Trading Strategies for Bullish Mat Hold Candlesticks
The following trading strategies are not intended for live trading. The trading strategies for the bullish holding candlestick patterns are as follows:
Bullish mat hold and the moving average
Bullish mat hold and the range filter.
- In bullish mat hold and moving average strategy, the rules to start a trade are:
The price closes higher than the moving average of 20-period
The moving average of 20-period is up
The trader has a bullish prediction
- In a bullish mat hold pattern and range filter, the trader will move forward if:
He has the bullish mat hold
The highest bullish candle is three times bigger than the highest bearish candle.
Conclusion:
The Mat Hold pattern is the formation of a candlestick indicating the continuation of the previous movement. Mat holding patterns can be either a downtrend or an uptrend. The bullish Mat Hold candlestick pattern consists of five candlesticks. The first and fifth are big and bullish. The second, third, and fourth candles are smaller and bearish. This article also discusses the implications of bullish carpet-holding patterns. We have also analyzed the bullish hold pattern and different trading strategies for the bullish candlestick pattern.
