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Bullish Belt Hold Candlestick

The bullish belt hold is one of the better performing candlesticks that I researched. It acts as a bullish reversal often, placing its rank at 11 out of 103 (where 1 is best) and it occurs frequently in nature (ranking 22). Overall performance is well back of the pack, though: 62. That is because the return over 10 days is lousy when compared to other candle patterns.

As the important results show (see above), the candle functions well as a bullish reversal in practice as well as in theory. The frequency rank is 22, meaning the candle occurs often, so it is easy to find in a historical price series. The overall performance is mid list, 62, and that is because of the comparatively poor performance over the 10 day measurement period.

Bullish Belt Hold: Important Results

Theoretical performance: Bullish reversal

Tested performance: Bullish reversal 71% of the time

Frequency rank: 22

Overall performance rank: 62

Best percentage meeting price target: 74% (bull market, up breakout)

Best average move in 10 days: -5.2% (bear market, down breakout)

Best 10-day performance rank: 28 (bear market, down breakout)

All ranks are out of 103 candlestick patterns with the top performer ranking 1. “Best” means the highest rated of the four combinations of bull/bear market, up/down breakouts.

The above numbers are based on hundreds of perfect trades. See the glossary for definitions.

Bullish Belt Hold

Bullish Belt Hold: Discussion

The post breakout trend in a bull market after an upward breakout results in the best percentage meeting the price target (which is the candle height projected upward or downward, depending on the breakout direction). The average move 10 days after the breakout is not exceptional at -5.2%, meaning price drops. The best performance over the 10-day measurement period occurs in a bear market after a downward breakout. The candle ranks 28 out of 103 candles, where 1 is best.

If you want a few bones from my Encyclopedia of candlestick charts book, here are three to chew on. The pages refer to the book where the tips appear.

Bullish Belt Hold: Identification Guidelines

Characteristic	Discussion
Number of candle lines	One.
Price trend leading to the pattern	Downward.
Configuration	Look for a white candle with no lower shadow, but closing near the high.

Bullish Belt Hold: Three Trading Tidbits

The chart shows three bullish belt hold candlesticks on the daily scale. Candle A has a small upper shadow and the candle acts as a reversal of the short-term downtrend but fails. Since price closes below the belt hold’s low, the breakout is downward, resuming the downtrend already underway.

Bullish belt hold candles that appear within a third of the yearly low perform best — page 130.
Belt hold candles taller than the median have post breakout performance significantly better than those shorter than the median — page 131.
Belt holds with comparatively tall upper shadows outperform — page 131.

Bullish Belt Hold: Example

Belt hold C appears just after a minor low, but this bullish belt hold acts as a reversal. The candles leading to C show price falling. At C, the stock begins posting higher closes, moving price up. The down to up movement surrounding the bullish belt hold qualifies this belt hold as a reversal.

The difference between belt hold A and C is that C has an upward breakout but A breaks out downward. Both have price trends leading downward into the candle.