Bearish Belt Hold
Reference values based on Bulkowski's "Encyclopedia of Chart Patterns". Data is primarily from U.S. markets and may differ for other markets.
A single-candlestick pattern that appears during an uptrend. Price opens with a gap up, then the open equals the high, and selling drives the price down to form a large bearish candle. The absence of an upper shadow is characteristic, indicating that buyers were completely overwhelmed from the open. This is an early signal of a potential trend reversal.
Enter short at the open of the next candle after the belt hold is confirmed, or when price drops below the belt hold's low.
Project 1.5 to 2 times the body length downward from the low to determine the price target. Also reference nearby support lines.
Place a stop-loss slightly above the high of the belt hold (which equals its open).
Increased volume during formation is important. Without volume confirmation, the probability of a false signal increases.