The Mat Hold Candlestick Pattern is similar to the “Rising Three Methods” pattern. The Mat Hold Candlestick Pattern has the look of an “Upside Gap Two Crows” pattern except that the second black (or red) body (third day) dips into the body of the large white (or green) candle. It is followed by another small black (or red) body that dips a bit further into the white (or green) candle body. The final day gaps to the upside and it continues its up-ward movement to close higher than the trading range of any of the previous days.
The implication of the Mat Hold Candlestick Pattern is that the trend has not stalled. This is a good point to add to positions. The Mat Hold Candlestick pattern is a stronger continuation pattern than the “Rising Three Methods.” During the days of “rest,” unlike the “Rising Three Methods,” the price stays close to the top of the white (or green) candle’s upper range.
Criteria
- An up-trend is in progress and a long white (or green) candle forms
- A gap up day, that closes lower than its open, creates a small black (or red) candle
- The following two days form small candles somewhat like the Rising Three Method.
- The final day gaps up and closes above the trading ranges of the previous four days.
Pattern Psychology
The Mat Hold Candlestick Pattern does not pull back as much as the Rising Three Method and it is easier to identify. The pull-back days are less concerning and the relatively flat rest period does not create the same amount of concern that the Rising Three Method creates. There are three days in which the bears are not able to knock the price down to any great degree and as a result the bulls step back in with confidence.
Japanese Candlestick trading signals consist of approximately 40 reversal and continuation patterns. All candlestick patterns have credible probabilities of indicating correct future direction of a price move.
The investment psychology incorporated into candlestick signals makes it easier to understand what is going on in an investor’s mind. The signals were created through hundreds of years of visual analysis and interpretation by successful Japanese Rice traders.
Please continue to learn how to identify each different candlestick trading pattern as well as what that pattern indicates is occurring in the markets.
