How to Profit from the Mat Hold Candlestick Pattern in Any Market

The Mat Hold candlestick pattern is a continuation pattern that signals a brief pause in the trend before the momentum resumes in the same direction. 

Unlike many candlesticks patterns that indicate potential reversals, the Mat Hold pattern suggests that the dominant trend remains intact despite a temporary pullback.

This pattern can appear in both bullish and bearish trends, but traders typically look for it in strong uptrends, where it signals that buyers remain in control. 

Recognizing the Mat Hold pattern can help traders stay in profitable trades longer instead of prematurely exiting on minor pullbacks.

The Mat Hold pattern comprises five candles and is a strong continuation signal. It typically forms like this: 

1. First candle – A strong bullish mat hold candle (or bearish mat hold in a downtrend) that confirms the prevailing trend. This candle is often a bullish candle that signals strong buying pressure.
2. Second, third, and fourth candles – Small candles, sometimes appearing as a black candle, red candle, white candle, or green candle, that move against the trend but stay within the range of the first candle.
3. Fifth candle – A strong bullish mat hold (or bearish mat hold) candle that closes above the first candle’s high, confirming trend continuation.

   Unlike other pullback patterns, the key to a valid Mat Hold is that the corrective candles remain within the first candle’s range before resuming the trend.This pattern suggests that the market attempted to push higher, but sellers quickly overwhelmed buyers, leading to lower closes.

The Mat Hold candlestick pattern is illustrated below.

• Appears in strong trends and signals a brief consolidation before continuation.
• Five-candle structure:
  • • First candle: Strong trend-confirming candle.
    • Next three candles: Minor pullback or sideways movement within the first candle’s range.
    • Last candle: A strong breakout candle resuming the trend.
• The corrective phase does not break the first candle’s low in an uptrend or high in a downtrend.
• Works best in high-momentum markets, where trends continue after brief pauses.

The Mat Hold pattern represents a momentary pause in the trend before momentum resumes in the same direction.

1. First candle – Confirms that the trend is strong and buyers (or sellers) are in control.
2. Next three candles – Show a temporary pullback or consolidation. Some traders take profits, and new buyers/sellers step in.
3. Last candle – When the trend resumes, the brief pause signals a healthy correction, not a reversal.

This chart pattern is often seen in strong market trends where minor corrections get absorbed quickly, leading to trend continuation. Applying Fibonacci retracements can help confirm strong entry points.

Market Conditions

The Mat Hold pattern is most effective in strong trending markets. In an uptrend, it signals a bullish mat hold continuation, while in a downtrend, it confirms a bearish mat hold continuation.

Volatility Considerations 

• In high volatility markets, the corrective candles may be wider, but the overall chart pattern structure remains intact.

• In low volatility markets, the pullback phase is usually smaller, making identifying the pattern easier. 

• Stop loss placement: Below the low of the pattern (in an uptrend) or above the high of the pattern (in a downtrend). Setting a stop loss at key support and resistance levels ensures controlled risk management.
• Entry strategy: Enter after the breakout candle (fifth candle) closes, confirming the continuation of the trend.
• Profit targets: Use previous resistance levels, Fibonacci extensions, or a risk-reward ratio of at least 2:1.

• The pullback candles break below the first candle’s low – This invalidates the pattern and may indicate a reversal instead of a continuation.
• Last candle fails to break out strongly – If the last candle is weak, the pattern lacks confirmation.
• Low volume on the breakout candle – A lack of strong volume reduces the reliability of the breakout.

To incorporate the Mat Hold pattern into a systematic trading strategy, traders should:

1. Identify a strong trending market before the pattern appears.
2. Confirm the five-candle structure and ensure the pullback remains within the first candle’s range.
3. Use volume and momentum indicators to validate the breakout candle.
4. Set stop-loss levels below the lowest point of the pattern.
5. Backtest the pattern across different markets and timeframes before applying it to live trading.

Below is a simple Amibroker AFL script to detect the Mat Hold pattern:

// Mat Hold AFL Code for Amibroker

_SECTION_BEGIN(“Mat Hold”);

 FirstBullish = Ref(Close, -4) > Ref(Open, -4);

Pullback1 = Ref(Close, -3) < Ref(Close, -4) AND Ref(Low, -3) > Ref(Low, -4);

Pullback2 = Ref(Close, -2) < Ref(Close, -4) AND Ref(Low, -2) > Ref(Low, -4);

Pullback3 = Ref(Close, -1) < Ref(Close, -4) AND Ref(Low, -1) > Ref(Low, -4);

BreakoutCandle = Close > Ref(High, -4);

 MatHold = FirstBullish AND Pullback1 AND Pullback2 AND Pullback3 AND BreakoutCandle;

 PlotShapes(IIf(MatHold, shapeUpArrow, shapeNone), colorBlue, 0, High);

 _SECTION_END();

This script helps traders spot Mat Hold formations on stock charts.

The Mat Hold candlestick pattern is a strong chart pattern that helps traders stay in profitable trades despite temporary pullbacks.

It consists of five candles, with an initial strong move, a controlled pullback, and a breakout confirming the trend continuation. The pattern works well when combined with Fibonacci retracements and technical analysis techniques.

When used correctly and confirmed with other technical indicators, this pattern provides high-probability trade setups for systematic traders.

Links to articles about other Candlestick Patterns

1. Doji
2. Hammer
3. Inverted Hammer
4. Bullish Engulfing
5. Bearish Engulfing
6. Morning Star
7. Evening Star
8. Shooting Star
9. Hanging Man
10. Piercing Pattern
11. Dark Cloud Cover
12. Three White Soldiers
13. Three Black Crows
14. Dragonfly Doji
15. Gravestone Doji
16. Spinning Top
17. Marubozu
18. Tweezer Top
19. Tweezer Bottom
20. Bullish Harami 
21. Bearish Harami
22. Rising Three Methods
23. Falling Three Methods
24. Bullish Abandoned Baby 
25. Bearish Abandoned Baby 
26. Bullish Kicker 
27. Bearish Kicker
28. Three Inside Up
29. Three Inside Down
30. Upside Gap Two Crows
31. Mat Hold
32. Upside Tasuki Gap
33. Downside Tasuki Gap