What is Bearish Belt Hold Candlestick Pattern

Stock market trading requires a lot of analytical and critical decision-making. Before you make any investment, it is important to know the facts. These facts could include information about the stock's past performance, current factors that affect it and how it will perform in the future. To analyze the market, trade professionals employ a variety candlestick patterns. The Bearish Belt Hold candlestick is one of the most popular types. This guide will help you to understand the Bearish Belt Hold candlestick pattern in greater detail.

Bearish Belt Hold Definition simplified

The Bearish Belt Hold candlestick pattern is composed of two candlesticks. The first is bullish and the second is bearish. Two conditions must be met in order for a bearish hold pattern to form. These conditions are:

1. The bullish candle should be part of a positive trend.
2. The candle should be open and close as close to/at the end of the previous candle.

The salient features of a Bearish Belt Hold pattern

These are the main characteristics of a bearish pattern

1. A bearish reversal candlestick is a pattern that can be formed during either an uptrend, or a downtrend. The key to trading success is in analyzing where the trend is heading.

2. The absence or presence of an upper shadow is a sign that traders can identify a bearish pattern. This is often evident in bullish Belt Hold Patterns.

3. A bearish hold is when the price of the share has fallen to a point where sellers were able to maintain control of it throughout the trading session. This is because the stock's opening price was never higher than it currently is.

4. The bullish pattern's final characteristic is that trading opens when the share price pushes lower. This is why the upper shadow is absent in the bearish candlestick. This is a sign that sellers had complete control of the trading session.

Instructions for making a bearish candlestick pattern

To form a Bearish Belt Hold pattern, there are three requirements. These are:

1. Bearish Belt Hold must have a shaven head, meaning that there should be no upper shadow. If an upper shadow does occur, it should be minimal.

2. A bearish hold will see the price of the share close to or just below its trading session lows.

3. Bearish belt hold candlestick patterns with red bodies are typically identified by their red-coloured real bodies. However, there are instances when real bodies with green colours may form.

Bearish belt Hold Pattern and markets

Most participants in the stock market are bullish and optimistic about the future. This creates a greater pressure to buy stocks rather than sell them which results in an ascending stock market. The bearish belt's first bullish candle forms at this point. The market now experiences a positive gap because of the new positive market sentiment. Investors and traders begin to anticipate a market reversal, as the market is currently in an uptrend. This changing trend means that stock sellers are under increasing pressure. This ensures that the market fills the gap and closes at the previous bar. The market then takes back any gains or profits that were made during the positive gap. This is a sign that sellers now dominate the market. It may also indicate that sellers will continue to be in control and start a bearish trend.

Conclusion

Bearish Belt Hold candlestick patterns are not reliable because they occur so often. It can also be inaccurate when predicting shares prices.