Mat-Hold Candle Pattern Explained

Mat-Hold Candle Pattern Explained
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The Mat-Hold Candle Pattern is a candle pattern formed by four or six candles and signals a potential continuation in the market. In this article we will show you how to identify them in the right market position with real chart examples.

The Mat-Hold Candle Pattern is a four or six candle pattern which signals a potential continuation in the market. Mat-Hold Candle Pattern is bullish and should be identified as a signal when occurring in an up-trending market or in the middle of a range.

Mat-Hold Candle Pattern Criteria:

  • The Mat-hold Candle Pattern occurs in a bull market and is a bullish continuation pattern.
  • The first three candlesticks are similar to the upside-gap two crows but another red (bearish) candlestick follows.
  • If the next candlestick is green (bullish) and gaps above the last red candlestick’s upper shadow or closes above the last red candlestick’s high, then it is a potential signal to buy the continuation.
  • This pattern can have two, three, or four red candlesticks.

Additional notes:

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 classification table for this pattern.

Mat-Hold Candle Pattern Classification Table

Number of Candles In Pattern 4 or 5 or 6
Type: (Reversal/Continuation) Continuation
Bullish/Bearish/Indecision Bullish
Market Conditions: Range, Down-trend, Up-trend Up-trend, Range
Position: Top, Bottom, Range Range

What Price Action Does The Mat-Hold Pattern 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.

The first part of the Mat-Hold candle pattern looks like the Upside-Gap Two Crows pattern which is a bearish reversal pattern.

However, this bearish start to the pattern is subsequently broken by a strong green (bullish) candle that opens on a gap up from the last red candle and closes above the upper shadow of the first red candle of the pattern

This change from a potential bearish reversal to a strong bullish continuation pattern is a good potential signal of the uptrend strengthening.

As with any continuation pattern it is always useful to see confirmation from another technical indicator or market structure to be confident that it will continue the trend and not stall.

Hint: It is always good practice to look for confirmation for any signal that you are looking to trade.

Mat-Hold Pattern Example With Confirmation

In this example on the US30 market the price action had been up-trending towards an area of round level resistance.

The market looked like it was moving into a reversal at the resistance level but then broke out with a strong bullish candle that formed a Mat-Hold Candle pattern.

This rejection of the reversal along with a break through the resistance level was a good sign that the market would continue the trend upwards.

Mat Hold Candle Pattern With Confirmation Example
Mat Hold Candle Pattern With Confirmation Example

Note: you can get a free round level indicator for MT4 from us here: Round Levels MT4 Indicator.

In What Market Conditions Does The Mat-Hold Pattern Become A Signal?

To recap – the Mat-Hold Candle Pattern is a potential signal when occurring in an up-trend and especially if followed by confirmation or a break of market structure (resistance).

Let’s look at some examples.

Mat-Hold Candle 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 US30 market example the market was in a strong up-trend with good momentum. A potential break in the momentum occurred with three consecutive red candles.

However, this was rejected with a green candle that opened on a gap up. Although it did not close above the first red candle, the subsequent price action continued the move up and confirmed the continuation.

Mat Hold Candle Pattern In An Up-trending Market Example
Mat Hold Candle Pattern In An Up-trending Market Example

Mat-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

Although not traditionally used as a signal in a ranging market it can be seen as a useful signal that the top of the range has not been formed as yet.

In the US30 market example below you can see an example where a Mat-Hold Pattern showed that the top of the range had not been formed and the market had further to run before reversing.

Mat Hold Candle Pattern In A Ranging Market Example
Mat 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

Upside-Gap Two Crows Candle Pattern

The first part of the Mat-Hold Candle Pattern is very similar to the Upside-Gap Two Crows Pattern which is a bearish reversal pattern. To learn more about that pattern, read the article here.

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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