Belt Hold Candle Pattern Explained (real chart examples)

Belt Hold Candle Pattern Explained (real chart examples)
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The Belt Hold Pattern is a candlestick chart pattern which signals a potential reversal in the market. In this article we will show you how to identify it in the right market position with real chart examples.

The Belt Hold Candle Pattern is a candle pattern which signals a reversal in the market. The Pattern can be Bullish or Bearish depending on where it forms.

Bullish Belt Hold should be identified as a signal when occurring in an down-trending market or in the middle of a range. Bearish Belt Hold should be identified as a signal when occurring in an up-trending market or in the middle of a range.

Belt Hold Candle Pattern Criteria:

  • Bullish Belt Hold: A strong green (bullish) candlestick which opens on the low of the session (or with a very small lower shadow) and moves higher for the rest of the day.
  • Bearish Belt Hold: A strong red (bearish) candlestick which opens on the high of the session (or with a very small upper shadow) and continues lower through the session.
  • The longer the height of the belt-hold candlestick line, the more significant it becomes. Belt Hold Patterns are more important if they have not appeared for a while.

Additional Notes

  • The Bullish Belt Hold Patterns also referred to as a shaven bottom candle pattern.
  • If the market is at a low price area and a long bullish belt hold appears, it forecasts a rally.
  • The Bearish Belt Hold Pattern line is also referred to as a shaven head candle pattern.
  • If prices are high, the appearance of a bearish belt hold signals a potential top reversal.

Quick Reference Guide – Candlestick Basics. If you need a reminder of what candlesticks are have a look at our free PDF – Candlesticks Explained.

The criteria and examples above are just the technical definitions of this pattern. However patterns are only useful with context and with real chart examples.

No pattern will ever exactly match the criteria and in order to be a useful signal must occur in the correct place in a trend. Let’s start by looking at the the classification table for this pattern.

Bullish Belt Hold Candle Pattern Classification Table

Number of Candles In Pattern 1
Type: (Reversal/Continuation) Reversal
Bullish/Bearish/Indecision Bullish
Market Conditions: Range, Down-trend, Up-trend Down-trend, Ranging
Position: Top, Bottom, Range Bottom

Bearish Belt Hold Candle Pattern Classification Table

Number of Candles In Pattern 1
Type: (Reversal/Continuation) Reversal
Bullish/Bearish/Indecision Bearish
Market Conditions: Range, Down-trend, Up-trend Up-trend, Ranging
Position: Top, Bottom, Range Top

What Price Action Does The Belt Hold Represent?

All candlestick patterns are formed by price action. But the popular ones represent price action that may have significance in signalling the direction of the market.

Bullish Belt Hold Candle Pattern

A Bullish Belt Hold is formed when a session opens and immediately moves up from its low on strong price action. This results in the shaven bottom and the size of the candle should be relatively large.

If this happens after a down-trend or it can signal a reversal and a potential rally upwards as the inability to move below the open price is a sign that the down-trend has run out of steam.

Bearish Belt Hold Candle Pattern

A Bearish Belt Hold is formed when a session opens and immediately moves down from its high on strong price action. This results in the shaven head and the size of the candle should be relatively large.

If this happens after an up-trend or it can signal a reversal and a potential move downwards as the inability to move above the open price is a sign that the up-trend has run out of steam.

In What Market Conditions Does The Bullish and Bearish Belt Hold Candle Pattern Become A Signal?

To recap, the Bullish Belt Hold Pattern is seen as a potential reversal pattern when it forms as relatively large candle in an up-trend

The Bearish Belt Hold Pattern is seen as a potential reversal pattern when it forms as a relatively large candle in an up-trend.

Note: With any candle pattern or signal, it is more significant when there is confirmation from another indicator or via forming at a key level. It is always good practice to look for confirmation for any signal that you are looking to trade.

Belt Hold Pattern With Confirmation

In the UK100 market example below the market had been a sustained uptrend since breaking through the 6000 mark. On the daily chart we can see how the market started a new downward trend.

The market then reached the level at which it had previously found support (on the weekly time frame). A Bullish Belt Hold formed and the market moved back up.

Belt Hold Pattern With Confirmation Example 1
Belt Hold Pattern With Confirmation Example 2
Belt Hold Pattern With Confirmation Example 2

Bullish Belt Hold Candle Pattern In A Ranging Market

A ranging market is one where the price action moves up and down between two sets of support and resistance. This is also known as a sideways, balancing or horizontal market. In essence the price action is struggling to break out of the range decisively either on the upside or downside.

Ranging Market Example
Ranging Market Example

Reversal patterns are weaker signals in a ranging market but can sometimes validate one end of a range.

In the US500 Market example below we can see how the Bullish Belt Hold Pattern marked the bottom of the range and started the move back up to the top of the range.

Bullish Belt Hold Candle Pattern In A Ranging Market Example
Bullish Belt Hold Candle Pattern In A Ranging Market Example

Bullish Belt Hold Pattern In A Down-Trending Market

A down-trending market is one where the price action generally moves down over time and is characterized by lower lows and lower highs.

Down-trending Market Example
Down-trending Market Example

In this US500 market example below the market was in a downtrend. A final strong move down was rejected via the formation of the Bullish Belt Hold Pattern and the market reversed direction.

Bullish Belt Hold Pattern In A Down-Trending Market Example
Bullish Belt Hold Pattern In A Down-Trending Market Example

Bearish Belt Hold Pattern In An Up-Trending Market

An up-trending market is one where the price action generally moves down over time and is characterized by higher lows and higher highs.

Up-trending Market Example
Up-trending Market Example

In this example below of the US30 market the market was uptrending and had a short move down followed by an attempt to break up.

This move was met with the formation of a Bearish Belt Hold Pattern which was also a relatively large candle. The market failed to break up and continued down.

Bearish Belt Hold Pattern In A Down-Trending Market Example
Bearish Belt Hold Pattern In A Down-Trending Market Example

Bearish Belt Hold Candle Pattern In A Ranging Market

In the UK100 market example below the market was moving towards the top of the range and formed a Bearish Belt Hold Pattern. This confirmed the top of the trend and started the move back down the range.

Bearish Belt Hold Candle Pattern In A Ranging Market Example

Candle Pattern MT4 Indicator Downloads

If you trade using MT4 then why not try out our free MT4 indicators? Most of our indicators, including the most common candle pattern indicators are Free and available for download here: MT4 Indicator Page.

Most of our candle indicators also have an alternate version which can show the signal in a separate indicator window of the chart if that is your preference.
For advanced users you can use our Pin Bar Pattern Manager (Paid) to specify your own parameters of candles you want to identify. You can find that here.

Important Information About Candlestick Patterns

Attribution:

All of the candlestick patterns that we explain on NothardTrading.com must be attributed to Steve Nison and his books on candle charting, the most famous of which was Japanese Candlestick Charting Techniques (Amazon). You can also find out more at his website here.

Interpretation Of Candle Patterns:

It is important to note that these patterns were originally identified on the daily timeframes of index charts, which is still where they are the most useful. However, this does not mean that they cannot be used for other markets or time frames.

No signal is perfect and should never be used as such. Any patterns that you identify only signals a potential move based on the fact that history repeats itself and forms regular patterns in similar situations.

But past performance is no guarantee of future results! So always treat these patterns with care and think of these guidelines when using them.

Best practice guide for trading of candle patterns:

  • No pattern is ever perfect. Be aware that patterns will form slightly differently each time and in different markets.
  • Use them as consistently as possible. Even though you will never find patterns exactly the same, you should always implement a consistent ruleset when identifying and using patterns.
  • It is never a guarantee, only an indication.
  • Make sure you are using it in the right context. For example if it is a continuation pattern then don’t use it to trade reversals!
  • Use multiple signals (confirmations) to have more confidence in your trading.

Related Candle Patterns

Marubozu Candle Pattern

The Marubozu pattern is not always consistently described and is sometimes confused with the Belt Hold Pattern due to the shaven head or bottom.

On Nothardtrading.com, we describe a Marubozu as having both a shaven head and bottom (no wicks on either side).

Read about it here: Marubozu (Shaven) Candle Pattern Explained.

More About Candlestick Patterns

If you are interested in reading more about candlestick patterns you can find our articles on this topic here: https://www.nothardtrading.com/category/candle-patterns/ or choose a pattern below to read more. 

Justina Nothard

Justina Nothard

Hi, I’m Justina Nothard, a retail investor trading Stock Index Futures.

I understand how hard it can be for the ordinary trader to learn the basics and find useful tools and practical information.

This is why I decided to create Nothard Trading to help you take control of your trading.

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