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How to Read the Mat Hold Chart Pattern in Trading


Candlestick patterns are one of the essential ways used to study the market. There are several types of candlestick patterns that traders study to gain valuable insights and make informed decisions. Mat hold candlestick patterns represent the directional trend of stocks or commodities.

A mat hold pattern can either be bullish when the market is declining or bearish when there is a significant upswing. Let’s read on to understand more about mat hold patterns, their different types, and ways you could use the pattern to your benefit.

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Understanding Mat Hold Patterns

The pattern starts with a bullish or bearish trend on day one. The next three days will show a trend opposite to the directional trend of the first day. Lastly, the fifth day mimics the trends of the first day, pushing in the same direction. The mat hold pattern is a dependable indicator seen in market analysis but most of the time, seeing the pattern is rare as it does not appear more often.

Due to its rarity, mat hold patterns are sometimes confused with the rising-three indicator. Still, mat hold patterns are used to predict how long would the market uptrend last. To better understand these patterns, try looking for examples of bullish and bearish trends so you can easily identify these patterns on a chart.

Bearish Mat Hold Patterns

Bearish mat hold candlesticks present as a 5-candle pattern that appears during a rising market. This pattern indicates the bearish market is turning stagnant and will most likely fall down after the pause. As mentioned above, it will be easy to identify a bearish mat hold pattern as the first and last candles will show a downward trend whereas the middle candlesticks will point towards an uptrend.  

Bullish Mat Hold Patterns

Similar to the bearish trend, bullish mat hold patterns are also represented by 5 candlesticks but the first and the last candles show an uptrend while the middle 3 candles show a fall. Bullish patterns come during an uptrend and indicate the market will keep rising.

Inverted Mat Hold Patterns

This pattern is a variation that is represented by 5 candlesticks. The first candle starts with a very bearish trend after which three bullish candles follow. Each of these 3 candlesticks represents a bullish trend that is higher than the previous candle. Lastly, the final candlestick should also point towards a bearish trend.

Identifying The Patterns

The structure of a mat hold is composed of 5 candlesticks each representing a bullish or bearish trend depending on the type of pattern. Studying the mat hold pattern is essential for investors and traders as it provides valuable insights to help you make the right decision. If you are an aspiring trader or investor, doing your homework is crucial as it will assist you in understanding the market trends in a better way.

Bullish Mat Holds

This scenario is generated when there is a market uptrend, influencing more investors to benefit from the rising market. As a result, investors flock in on the rising bullish market. At the same time, investors become concerned about too many investors jumping on the bandwagon, resulting in investors bailing out from their positions. This bailout causes a surge in sell orders all during similar times and influences a bearish trend. However, the last candle starts to take life and moves uptrend, indicating a rise in the market that will move up for quite some time.

Bearish Mat Holds

During bearish mat holds, the market trends are negative, making investors think of hitting lower prices. To save their invested capital, investors turn to sell, resulting in a beamish candle. Due to this selling influx, the market becomes oversold so investors stop selling while waiting and expecting to see a pullback. Now, the bullish trend starts, making three candles show a positive trend. However, in the end, this positive trend fades away, indicating the market to fall down even further.

Advantages of Using Mat Hold Patterns

These patterns are truly beneficial for the trader when used correctly. There is a continuous candlestick pattern that can be identified easily when analyzing market trend charts and providing accurate information. Investors and traders use this pattern as an indicator to join in on the market trends and these mat hold patterns can also be used with other technical analysis tools so you can get the best possible outcomes in terms of making a decision. Following the pattern gives you a success rate of around 70% which is quite promising when trading.

Trading Mat Hold Patterns

As mentioned above, traders who want to join in on an existing trend follow mat hold patterns. They make this decision after extensive evaluation of the market, the influencing factors, and any other aspect that can affect their strategy. Leading traders suggest entering the market and opening a position when there is a 5th candle in place and you have already anticipated the market trend. As you open a position, remember to put a tight stop order in place. Using a stop-loss order ensures you will not be affected by additional losses if the market trends go against the proceedings you anticipated. In forex trading, losing is a part of the game but using trading tools like a stop loss can easily help you to be on the safe side and avoid as much loss as possible.

Photo by Austin Distel on Unsplash

Trading is all about patience, studying the market, and making the right move at the right time. There is so much that goes into making a successful trader. Most people think of trading as simple as buying at low rates and selling when the market rises for profit. However, it’s not true as an extensive analysis of the market is necessary that cannot be fulfilled by simply buying or selling. To get the most out of your time, consider reviewing the basics and getting familiar with the terminology so you can better understand the terms used, ultimately improving your trading game over time.

Clyde is a business graduate interested in writing about latest news in politics and business. He enjoys writing and is about to publish his first book. He’s a pet lover and likes to spend time with family. When the time allows he likes to go fishing waiting for the muse to come.