Belt Hold Line Definition
The buckle grip line candlestick is ostensibly the whitened marubozu and dark marubozu over the context of a fashion. The bullish belt grip candle sticks to the top of the afternoon and shuts near the top. This candle introduces it self at a downtrend and it is an early indication that there’s a possible bullish change. Unexpectedly the thickest buckle candle opens at the top of the afternoon and shuts near the non. This candle introduces it self in a up trend and can be an early indication that there’s a possible bearish alteration. These candles are all reliable alteration pubs, but reduce their importance whether there really are quite a few buckle grip lines at proximity.
Not to complicate the problem farther, however, the blueprint may also work as a point pattern, which we’ll cover later in this specific informative article.
Bullish Belt Hold Line
The thickest buckle grip line openings back on the start of this pub, which represents the non of this pub, after which flares higher. Shorts who entered places on the start of this pub are currently submerged, which contributes to the purchasing trend.
Bullish Belt Hold Line
The cost action then continues with a big bullish candle.
The candle has no lower candle wick and closes at its high.
This cost action confirms both a bullish marubozu and bullish belt hold line pattern.
Bearish Belt Hold Line
The bearish belt hold line gaps up on the open of the bar, which represents the high of the bar, and then sells off. Longs who entered positions on the open of the bar are now in losing positions, which adds to the selling frenzy.
Bearish Belt Hold
As you watch the layout has exactly the similarly faculties as the thickest belt grip line however in the opposite way. The trading day begins using a gap.
A handful of spans later, the asset prints a solid bearish candle. The asset does not have any top candlewick and shuts at its lowest point, which confirms both the bearish marubozu and bearish belt grip lineup layout.
Trading the Belt Hold Line Pattern
Now you’re knowledgeable about the bullish and bearish variant of this belt grip lineup layout, let’s dip into the way to trade the design.
The fantastic point about the buckle online trading blueprint is the fact that the rules are simple to implement.
Of course, you need to be careful never to lose your selfcontrol, however ‘s necessarily true when trading.
Entry on Belt Hold Line Candle
When you set a belt grip line candlestick, you would like to start an position in direction of this candle.
It’s really that simple!
Bullish Belt Hold Line Pattern
Above you find a good instance of a bullish belt grip line. This really is a enormous bullish candle and also a daytime trader ought to go long after the candle shuts as exhibited on the image.
Stop Loss on Belt Hold Line Candle
Like in any trade, you always need to safeguard your belt grip trades having a stoploss. Your stop loss needs to be put directly underneath the low of this entrance candle.
However, after all the marubozu candle looks throughout higher volatility, then the cost activity will frequently touch the prevent when placed close to the opposing hand of this candle.
Therefore, I advise that you put the prevent one candle off from the marubozu.
Hence, in the event that you’re purchasing a share onto a belt grip sign, then you ought to put your stoploss underneath the low of the candle which simplifies the final marubozu candle.
Conversely, if you’re attempting to sell a security on the belt grip signal, then your stop loss order should be found above the candle which simplifies the marubozu.
Bullish Belt Hold Line – Stop Loss
You are now looking at the similarly Bullish Belt Hold example. But this time around we included that a stop loss order underneath the decrease candlewick of this former candle.
Again, the bullish or bearish belt grip line candlestick is frequently large in size in accordance with the preceding candlesticks. Thus, you need to get ready for your volatility whilst the asset retraces its movement from scalpers accepting benefits.
So, picking the preceding candles extreme purpose for a stoploss amount, helps keep you from getting stopped out until the jog.
Profit Targets together with the Belt Hold Line Candlestick Pattern
When you employ a belt grip line trade that you should decide on an initial target.
The before all else option will be always to close your position when the asset runs partially two or 3 times the magnitude of this marubozu candlestick design.
The different benefit taking approach will be always to make use of cost actions rules to ascertain if to depart your trades.
This should class will demand greater skill and above all subject to permit this amount of subjectivity in your trading platform.
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Belt Hold Line Trading Strategy
Now that you’re knowledgeable about the belt grip line candlestick layout and the trading rules, then I shall now demonstrate a couple reallife examples.
We shall put in our trades directly after the final of this marubozu candle of this belt grip design. Our stoploss is going to be found across the other side of the candle which simplifies the marubozu candle.
We shall always be inside our trades before cost activity finishes double the magnitude of this final marubozu.
Belt Hold Line Trading Strategy
Above is your 5-minute graph of Master Card. The image illustrates a few buckle grip lineup trades.
The image starts with a small cost reduction. Unexpectedly, the cost activity shuts a comparatively big bearish marubozu candle. This affirms that the existence of a bearish belt grip candlestick design.
Therefore, we short MA (gloomy ) as prescribed at the trading technique.
Notice which our prevent loss is situated above the candle, and that is sold following the marubozu.
After we input the trade, the cost produces a small correction after which resumes the bearish tendency. But before the cost action finishes double the magnitude of this candle layout, we obtain the next bearish marubozu on the graph.
Thereforewe confirm another belt grip lineup and also we short Master Card back (red signal). We put our stop loss above the top of this candle which simplifies the bearish marubozu.
A handful of candles once we enter into the next trade, the cost activity finishes double the magnitude of their before all else marubozu.
However, are you really sure that you aren’t denying something? Exactly! We’ve got another trade available! We chase double the magnitude of this marubozu we had to start that position.
The interesting this is the cost act passes a solid correction of this bearish trend. The Master Card asset begins growing marginally and extends above the marubozu candle. This is the reason why I told you always to utilize the candle previously when setting your weight reduction. In this manner our stop comprises the cost activity in an excellent manner and the MA asset doesn’t touch our stop. We are still in the game!
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The cost action then resumes the bearish trend. The cost decreases with twice the amount of the opening marubozu and our target is completed and we close the trade.
Let’s now go through another belt hold trading example.
Bullish Belt Hold Line – Trading Strategy
You are now looking at the 5-minute chart of JP Morgan Chase & Co.. The image illustrates a bullish trade based on a bullish belt hold candle.
The chart starts with a cost reversal in the before all else four candles. A couple of candles later, the cost action closes a bullish marubozu, a.k.a. a bullish belt hold line. Therefore, we open a long trade as stated in our technique.
Notice that the previous candle is located above the bullish marubozu. For this sense, in order to set up our stop loss, we use the last candle, which has its body underneath the opening cost of the marubozu. The point is to have the stop a bit underneath the belt hold line.
After we enter the trade, JPM begins to boost.
When the before all else impulse is completed, the cost enters a correction phase, followed by a new trend impulse. The second trend impulse pushes the cost action to reach twice the size of the body of the bullish marubozu, which is our exit signal.
The benefit taking strategies of these two trades were based on twice the size of the belt hold pattern. Let’s now review a technique, where the benefit taking technique relies solely on cost action.
Bullish Belt Hold Line – Stop Loss based on Price Action
This is the 5-minute chart of Ford Motor Company.
The trading action begins with a cost decrease. Suddenly, a bullish marubozu prints on the chart.
Since we obtain the bullish belt hold on the chart, we purchase Ford. The stop loss (1) should be placed at the low of the previous candle as shown on the image.
Ford begins to rally after and slight correction.
Since we follow the cost action, we adjust the stop to the bottom of the correction. We now have two bottoms on the chart and we use them to build a bullish trend (blue). This trend could be used to close the trade in case of a breakout. The next trend impulse is stronger. The cost increases further and creates another bottom, where we place our third stop loss order. Now we have a locked-in benefit, which is guaranteed by the stop. The next cost boost is slight and the cost enters a consolidation phase afterwards. We use the lower level of the consolidation for our fourth stop loss.
The consolidation then brings the cost to the blue trend. At the similarly time comes the end of the trading session, therefore we close the trade.
You of course can use more complicated cost action rules to exit the trade, but you will find often than not, trend lines and candlesticks will do the trick.
- The belt hold line is a marubozu candle.
- The belt hold is a trend continuation pattern.
- There are two types of belt hold line candles:
- Bullish belt hold line (bullish marubozu)
- Bearish belt hold line (bearish marubozu)
- When you see a belt hold candle pattern, you should enter the marketplace in the direction of the formation.
- You should place a stop loss on your belt hold trades beyond the high or low of the preceding candle (depending on the trend).
- You have two options to take benefits when trading the belt hold line chart figure:
- You can use the size of the pattern to set a fixed target in advance two or three times the body of the pattern.
- You can use cost action rules to determine when to exit the trade.
- If you would like to take a more conservative approach to your trade entry, you could wait for the asset to retrace 50% or more of the marubozu candle. Again, this candle is often huge, so you could limit your risk by waiting for the pullback. Of course, you might miss the trade if it takes off, but I would prefer to protect my account instead of focusing on potential big gains.