Bet Hold

The Belt Hold is a minor reversal pattern composed of only one candlestick.

A Belt Hold can be either a bullish or a bearish signal, according to its colour and the trend in which it appears.

It can be observed over all time units.

Bullish Belt Hold:

A Bullish Belt Hold’s characteristics are as follows:

• The Belt Hold must appear after a downtrend.

• The Belt Hold forms a powerful white candlestick with no lower shadow (or a very short one)

A Bullish Belt Hold occurs after a downtrend. The session opens gap down but sales soon start to stop and purchase orders pour in, the price rises high enough to form a long green Japanese candlestick with a very short lower shadow (if any). This Belt Hold even forms a bullish engulfing, which reinforces the signal.

Bearish Belt Hold:

A Bearish Belt Hold’s characteristics are as follows:

• The Belt Hold must appear after an uptrend.

• The Belt Hold forms a powerful black candlestick with no upper shadow (or a very short one)

A Bearish Belt Hold occurs after an uptrend. The session opens with a slight gap up but purchases soon start to stop and selling orders pour in, the price drops low enough to form a long red Japanese candlestick with a very short upper shadow (if any). This Belt Hold even forms a Dark Cloud Cover which reinforces the signal.

The Belt Holds are not major reversal patterns but they reveal a pause in the evolution of prices. Nevertheless, the longer the Belt Hold, the more significant it is and it can thus be useful to take positions if other signals can reinforce it. A Belt Hold that would appear on a major support or a resistance will be more interesting for example. In the 2nd example, the price reverses after a failure on the 3600 pts resistance.

The pattern can also form another reversal pattern while still being a Belt Hold. Here, we saw that an engulfing or a Dark Cloud Cover could form but other patterns such as a Harami or a Bullish Piercing Line may also be observed. Since they are more powerful than a Belt Hold on its own, these patterns can give rise to position-takings after they have been validated. The invalidation threshold can then be placed below the support or above the newly formed resistance.