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What does Bearish Belt Hold mean?


Sam Button
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A Bearish Belt Hold candlestick pattern is an illustrative way of reflecting Price Action over a given period. It is seen as an indicator that the market trend is turning from being bullish to bearish.

Structure

The Bearish Belt Hold pattern is relatively easy to identify.
  • It is preceded by an upwards market trend.
  • The Bearish Belt Hold candle (with red or black body color according to your preference) must occur after a run of bullish candles.
  • The Bearish Belt Hold candle should be relatively larger than the preceding candles.
  • It should have a short lower shadow or no shadow at all.
  • The opening price is also the high price for the day.
  The Bearish Belt Hold candle has a red body which reflects that over that time period the closing price was below the opening price. The short lower shadow shows the closing price was also near to the low of the day.

Signal Strength

Bearish Belt Hold candles are a pattern that is relatively easy to spot, and it occurs relatively frequently. You will likely gain more benefit from the pattern by devoting time to gaining an understanding of how to grade the strength of the signal:
  • The longer the candle the stronger the signal
  • The signal is confirmed by the candle for the subsequent time period also being bearish (as shown in the below chart)
 

Uses

Bearish Belt Hold candlestick patterns are not considered to be the most reliable indicator of future price action.
  • Your use of them might be tempered by the fact that even patterns that meet all the above criteria turn out to be incorrect. Testing any strategy based on Bearish Belt Holds is best done in a Demo account or in very small size.
  • You may find that using them in conjunction with other indicators does lead to a profitable strategy.
  • A Bullish Belt Hold candlestick pattern formed by data taken over longer time periods is considered to offer a more reliable signal on the basis that more market participants have been involved in generating the selling pressure and bring about a downward trend.
  Whether you can profit from identifying Bearish Belt Holds is one question. It may be of greater benefit to you to be able to understand what the pattern is trying to say to you about the market.
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A bearish Belt Hold is a candlestick model that appears in an uptrend. 
A Bearish Belt Hold comprises of two candlesticks with the first one being bullish and connected to a positive trend. Conversely, the second candle should gap up and close near the first candle. The declining stock prices throughout the day create a long candlestick with no upper shadow and a small lower shadow. The idea is showing the possibility of a bearish trend. 
Take a bullish market scenario. The positivity in most participants improves the market, hence, the Bearish Belt Hold’s opening bullish candle. This attitude extends to the following trading session leading to a positive gap. However, the fear of a reversal triggers selling pressure so the market covers the gap and closes next to or at the exact close of the preceding bar. Therefore, the sellers’ market dominance may continue until they start a bearish movement. 
Avoid candlesticks you haven’t tried yourself to minimize losses. Like other charting techniques, observe the market for several days before predicting the trends.

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Hi Sam,

Thanks for coming here.

A bearish belt hold presents two candlesticks, the first being bullish and the other bearish. The opening bar develops in an ascent while the second one gaps up and ends next to or at the former candle's close. Hence, this pattern suggests a trend will become bearish. 
So, what's the interpretation of these symbols? Arising from a bullish environment, a majority of participants are hopeful about the market. Consequently, buying pressure overpowers selling pressure, thus, sparking an uptrend. This is when the initial candlestick forms.
The optimism spreads to the following trading session causing a positive gap. At this point, however, investors are anxious about a reversal. This activates the selling force, explaining the filled gap and the close near the first candle. A longer body means a stronger resistance.
Observing bearish belt holds doesn't eliminate the risk of going short. Again, the same strategy doesn't apply to all markets. That's why back-testing is paramount. You could also use past days' data as a confirmation.
 

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Hi Sam, thanks for joining us here.

The Bearish Belt Hold refers to a bearish reversal candlestick pattern which can take shape in both an uptrend and a downtrend. The focal point of this pattern when analyzing it is the position where it develops. It’s usually easy to identify the pattern due to its lack of an upper shadow.

When the pattern forms, it indicates that bears have gained control of the market for the entire trading session because the share price didn’t break above the opening share price. 

The reason this pattern lacks upper shadow is that the share price keeps declining from the moment trading starts. 

One of its other characteristics is that the price usually closes at or near the lows of the trading session.

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