DEFINITION of 'Mat Hold Pattern'

A pattern found in the technical analysis of stocks that ultimately indicates the stock will continue its previous directional trend (bullish or bearish). The pattern is initially indicated by a significant trading day in one direction or another, followed by three small opposite trending days. The fifth day then continues the first day's trend, pushing higher or lower, in the same direction as the first day's movement.

BREAKING DOWN 'Mat Hold Pattern'

The mat hold pattern is considered a very reliable but rare indicator in the technical analysis of stocks. It is often confused with the rising three's indicator, with the difference being that the trades on days two to four of the rising three indicator generally stay within the high and low established on the first day. The trading range of days two to four in the mat hold pattern can trade outside of the high-low range made on the first day.

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RELATED FAQS
  1. How do I build a profitable strategy when spotting a Mat Hold pattern?

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  3. What are the differences between patterns and trends?

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  4. How do I implement a forex strategy when spotting a Mat Hold pattern?

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  5. How are Mat Hold patterns interpreted by analysts and traders?

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