Decoding Trading Signals: The Mat Hold Pattern as a Reliable Indicator

1. What is the Mat Hold Pattern and Why is it Important?

The mat hold pattern is a type of candlestick pattern that indicates a continuation of an uptrend in a price chart. It is formed by four consecutive candlesticks, where the first one is a long white candle, followed by three small black candles that are contained within the range of the first candle, and then a fifth candle that closes above the first one. The mat hold pattern is important because it shows that the buyers are still in control of the market, despite some minor pullbacks, and that the bullish momentum is likely to resume. In this section, we will explore the following aspects of the mat hold pattern:

1. How to identify the mat hold pattern and what are its variations.

2. How to trade the mat hold pattern and what are the entry, exit, and stop-loss points.

3. What are the advantages and disadvantages of using the mat hold pattern as a trading signal.

4. What are some examples of the mat hold pattern in real-world markets and how they performed.

Let's start with the first point: how to identify the mat hold pattern and what are its variations.

2. How to Identify and Interpret it on a Candlestick Chart?

The mat hold pattern is a type of candlestick pattern that indicates a continuation of the current trend. It is formed by four candles that have the following characteristics:

- The first candle is a long white or green candle that shows a strong bullish momentum.

- The second candle is a small black or red candle that opens above the high of the first candle and closes slightly lower, indicating a minor pullback.

- The third candle is another small black or red candle that opens below the close of the second candle and closes even lower, indicating a further retracement.

- The fourth candle is a long white or green candle that opens above the close of the third candle and closes above the high of the first candle, confirming the continuation of the uptrend.

The mat hold pattern can be seen as a variation of the rising three methods pattern, which has similar features but requires three small candles instead of two in the middle. The mat hold pattern is considered more reliable than the rising three methods pattern because it shows less hesitation and more conviction from the buyers.

Some of the benefits of using the mat hold pattern as a trading signal are:

1. It can help traders identify and follow the direction of the dominant trend, which is often the most profitable strategy in technical analysis.

2. It can provide traders with an entry point to join the trend after a brief consolidation or correction, which can improve the risk-reward ratio and reduce the chance of getting stopped out by market noise.

3. It can offer traders a clear stop-loss level below the low of the third candle, which can protect them from potential trend reversals or false breakouts.

4. It can also give traders a target level based on the length of the first candle, which can be projected from the high of the fourth candle to estimate the potential profit.

An example of a mat hold pattern on a daily chart of Apple Inc. (AAPL) is shown below:

```code

| Date | Open | High | Low | Close |

The first candle on October 24 is a long white candle that shows a strong bullish momentum. The second and third candles on October 25 and 26 are small black candles that open above the high of the first candle and close lower, indicating a minor pullback. The fourth candle on October 27 is a long white candle that opens above the close of the third candle and closes above the high of the first candle, confirming the continuation of the uptrend.

A trader who spotted this mat hold pattern could have entered a long position at the open of October 27 at $150.45 and placed a stop-loss order below the low of October 26 at $149.81. The trader could have also set a target level based on the length of October 24's candle, which was $1.48 ($151.17 - $149.69). By adding this amount to October 27's high, the trader could have estimated a potential profit of $154.05 ($152.57 + $1.48). This would have resulted in a risk-reward ratio of about 1:3 ($0.64 / $1.92), which is favorable for most traders.

The mat hold pattern is a useful tool for traders who want to identify and interpret trading signals based on candlestick charts. It can help them follow the trend, enter at optimal points, set clear stop-loss and target levels, and improve their trading performance.

3. What Does it Reveal About the Market Sentiment and Momentum?

The Mat Hold Pattern, a technical analysis tool used in the world of trading, has garnered significant attention due to its potential to provide valuable insights into market sentiment and momentum. Traders and investors often rely on this pattern to make informed decisions, as it can serve as a reliable indicator of future price movements. In this section, we will delve deep into the psychology behind the Mat Hold Pattern, exploring what it reveals about market sentiment and momentum. We will analyze this pattern from various perspectives, shedding light on its significance in the trading world.

1. Understanding the Mat Hold Pattern: The Mat Hold Pattern is a bullish continuation pattern, consisting of five candlesticks. The first candlestick is a long white candle, which represents a strong bullish sentiment. It is followed by a shorter black candle, indicating a brief pause or consolidation. The subsequent three white candles show a resumption of bullish momentum. The second white candle of the pattern typically engulfs the previous black candle, signifying a strong resurgence of buying pressure.

2. Bullish Sentiment and Market Psychology: The Mat Hold Pattern reflects the psychology of market participants. The initial long white candle suggests a sudden influx of buyers, possibly triggered by positive news or a shift in sentiment. The subsequent black candle represents a minor profit-taking phase, but the fact that it is followed by three white candles illustrates that the bullish sentiment remains dominant.

For instance, consider a stock that has been underperforming for a while, and then a significant positive development occurs, like a new product launch or a strong earnings report. The initial surge in buying reflects the optimism of investors, and the Mat Hold Pattern may form as a result.

3. Confirmation of Momentum: One of the key strengths of the Mat Hold Pattern is its ability to confirm existing bullish momentum. When this pattern emerges, it signals that the uptrend is likely to continue, and traders can use it as a signal to enter or hold a long position. The engulfing of the black candle by the second white candle is a powerful confirmation of the ongoing bullish momentum.

For example, imagine a cryptocurrency that has been in a strong uptrend, and then a brief pullback occurs. The Mat Hold Pattern could materialize during this pullback, indicating that the trend is still intact and may continue upward.

4. support and Resistance levels: Another facet of the Mat Hold Pattern is its ability to provide insight into support and resistance levels. The low point of the black candle in the pattern can act as a support level, which traders can use to set stop-loss orders or identify potential entry points. Conversely, the high point of the pattern's first white candle can serve as a resistance level, offering a target for profit-taking.

To illustrate, consider a stock that has been in an uptrend but faces resistance at a certain price level. The Mat Hold Pattern could form just above this resistance, indicating a breakthrough might be imminent.

5. caution and Risk management: While the Mat Hold Pattern is a strong indicator of bullish sentiment and momentum, it's essential for traders to exercise caution and practice effective risk management. No pattern is foolproof, and the market can be unpredictable. Traders should use other tools and analysis methods in conjunction with the Mat Hold Pattern to make well-informed decisions.

For instance, if a trader solely relies on the Mat Hold Pattern without considering other factors, they may miss crucial information about the market, such as potential news events or economic data releases that could impact their trades.

The Mat Hold Pattern is a valuable tool in the arsenal of technical analysis, providing insights into market sentiment, bullish momentum, support and resistance levels, and potential entry and exit points. By understanding the psychology behind this pattern and using it in conjunction with other analytical methods, traders can make more informed and strategic decisions in the ever-changing world of financial markets.

4. When to Enter and Exit a Trade Based on the Mat Hold Signal?

The mat hold pattern is a bullish continuation pattern that indicates a strong uptrend in the market. It consists of four candlesticks: a long white candlestick, followed by three small black candlesticks that form within the range of the first candlestick, and then another long white candlestick that closes above the high of the first candlestick. The mat hold pattern is similar to the rising three methods pattern, but the difference is that the second and third black candlesticks can trade above the open of the first white candlestick, as long as they stay within its range. The mat hold pattern is a reliable indicator because it shows that the buyers are still in control of the market, despite some profit-taking by the sellers. The following are some trading strategies for the mat hold pattern:

1. When to enter a trade based on the mat hold signal: A trader can enter a long position after the confirmation of the mat hold pattern, which occurs when the fifth candlestick closes above the high of the first candlestick. This indicates that the uptrend has resumed and that the buyers have overcome the sellers' resistance. Alternatively, a trader can enter a long position earlier, after the formation of the third or fourth black candlestick, if they anticipate a strong breakout above the first candlestick's high. This can offer a better entry price and a higher reward-to-risk ratio, but it also involves more risk, as the mat hold pattern may not be confirmed.

2. When to exit a trade based on the mat hold signal: A trader can exit a long position based on several factors, such as their risk tolerance, trading objectives, and market conditions. Some possible exit strategies are:

- Using a trailing stop-loss: A trader can use a trailing stop-loss to protect their profits and follow the trend as long as possible. A trailing stop-loss can be placed below the low of each successive candlestick, or below a moving average or a trend line that acts as a dynamic support level.

- Using a target price: A trader can use a target price based on technical analysis or fundamental analysis to determine when to exit their position. For example, a trader can use Fibonacci extensions, pivot points, resistance levels, or earnings reports to set their target price.

- Using a time limit: A trader can use a time limit to exit their position if they do not see any significant price movement or if they want to avoid holding their position overnight or over the weekend. For example, a trader can exit their position at the end of the trading day or week, or before a major news event.

An example of a mat hold pattern and its trading strategy is shown below:

![Mat Hold Pattern Example]

In this example, the mat hold pattern is formed on the daily chart of Apple Inc. (AAPL). A trader can enter a long position after the confirmation of the pattern, which occurs when the fifth candlestick closes above $150. The trader can use a trailing stop-loss below the low of each successive candlestick, or below a 20-day moving average (MA) that acts as a dynamic support level. The trader can also use a target price based on Fibonacci extensions or resistance levels to exit their position. For instance, the trader can exit their position when the price reaches $170, which is near the 161.8% Fibonacci extension level and a previous resistance level. Alternatively, the trader can use a time limit to exit their position before Apple's earnings report on November 2nd, 2023.

The mat hold pattern is one of the many trading signals that can help traders identify and follow market trends. By understanding its formation and trading strategy, traders can improve their trading performance and profitability.

5. How to Set Stop Loss and Take Profit Levels to Minimize Losses and Maximize Gains?

One of the most important aspects of trading with the mat hold pattern is risk management. risk management is the process of identifying, assessing, and controlling the potential losses and gains that may arise from trading decisions. Risk management can help traders to protect their capital, optimize their returns, and achieve their trading goals. In this section, we will discuss how to set stop loss and take profit levels for the mat hold pattern, and how to minimize losses and maximize gains using this reliable indicator.

Some of the factors that affect risk management for the mat hold pattern are:

1. The direction and strength of the trend. The mat hold pattern is a continuation pattern that indicates that the existing trend will resume after a brief consolidation. Therefore, traders should only trade in the direction of the trend, and avoid trading against it. The strength of the trend can be measured by using indicators such as moving averages, trend lines, or ADX. A strong trend will increase the probability of a successful trade, while a weak trend may signal a reversal or a range-bound market.

2. The size and shape of the mat hold pattern. The mat hold pattern consists of four candlesticks: a long white candlestick, followed by three small candlesticks that form within the range of the first candlestick, and then another long white candlestick that closes above the high of the first candlestick. The size and shape of the pattern can provide clues about the potential price movement after the breakout. A larger and more symmetrical pattern will indicate a stronger bullish momentum, while a smaller and more distorted pattern may suggest a weaker bullish signal.

3. The entry and exit points. The entry point for the mat hold pattern is usually at the close or above the high of the fifth candlestick, which confirms the breakout of the consolidation zone. The exit point can be determined by using different methods, such as trailing stop loss, fixed target, or Fibonacci extensions. A trailing stop loss is a dynamic level that follows the price movement and locks in profits as the price moves in favor of the trade. A fixed target is a predetermined level that is based on a certain risk-reward ratio or a multiple of the risk amount. A Fibonacci extension is a tool that uses Fibonacci ratios to project potential price levels beyond the swing high or low.

4. The position size and risk-reward ratio. The position size is the amount of money that is invested in a trade, and it should be based on the risk tolerance and trading capital of each trader. A common rule of thumb is to risk no more than 1% to 2% of the trading account per trade. The risk-reward ratio is the ratio between the potential profit and the potential loss of a trade, and it should be at least 2:1 or higher. A higher risk-reward ratio will increase the profitability of a trading system, while a lower risk-reward ratio will require a higher win rate to be profitable.

To illustrate these concepts, let us look at an example of a mat hold pattern on a daily chart of Apple Inc. (AAPL).

![Mat Hold Pattern Example]

In this example, we can see that:

- The stock was in an uptrend, as indicated by the rising 50-day and 200-day moving averages.

- The stock formed a mat hold pattern between March 15 and March 21, 2023.

- The entry point was at $180.50, which was above the high of the fifth candlestick.

- The stop loss level was at $174.00, which was below the low of the first candlestick.

- The take profit level was at $192.50, which was calculated by adding twice the height of the pattern ($9.25) to the entry point.

- The position size was 100 shares, which required an investment of $18,050.

- The risk amount was $650 ($180.50 - $174.00 x 100).

- The reward amount was $1,200 ($192.50 - $180.50 x 100).

- The risk-reward ratio was 1.85:1 ($1,200 / $650).

As we can see from this example, trading with the mat hold pattern can provide consistent and profitable results if proper risk management techniques are applied. By setting appropriate stop loss and take profit levels, traders can minimize losses and maximize gains using this reliable indicator.

6. When to Avoid or Ignore the Mat Hold Signal and How to Confirm it with Other Indicators?

The Mat Hold pattern is a popular and widely used trading signal that can provide valuable insights into market trends and potential price reversals. However, like any trading indicator, it has its limitations and should not be solely relied upon for making trading decisions. In this section, we will explore the various circumstances in which it is advisable to avoid or ignore the Mat Hold signal, and how it can be confirmed or complemented with other indicators.

1. Market Conditions:

The Mat Hold pattern is most effective in trending markets, where there is a clear and sustained directional movement. In choppy or sideways markets, the pattern may produce false signals and result in poor trading decisions. Traders should exercise caution and consider other technical indicators to confirm the validity of the signal in such market conditions.

2. Timeframe Considerations:

The Mat Hold pattern may exhibit different levels of reliability depending on the timeframe being analyzed. For example, on shorter timeframes, such as intraday charts, the pattern may be less significant and prone to noise. Conversely, on longer timeframes, such as weekly or monthly charts, the pattern may carry more weight and provide stronger signals. Traders should be mindful of the timeframe being analyzed and adjust their trading strategy accordingly.

3. Confirmation with Other Indicators:

To enhance the reliability of the Mat Hold signal, traders can utilize other technical indicators to confirm its validity. For instance, combining the Mat Hold pattern with oscillators like the Relative Strength Index (RSI) or moving Average Convergence divergence (MACD) can provide additional confirmation of a potential price reversal. If these indicators align with the Mat Hold pattern, it strengthens the overall trading signal and increases the likelihood of a successful trade.

4. Volume Analysis:

Volume analysis can also play a crucial role in confirming the Mat Hold pattern. In an ideal Mat Hold pattern, there should be a significant increase in trading volume during the initial decline and subsequent consolidation phase. This indicates strong selling pressure and suggests that the pattern is more likely to be valid. Conversely, if the volume remains low or decreases during the pattern formation, it may indicate a lack of conviction from market participants and reduce the reliability of the signal.

5. Backtesting and Historical Analysis:

Before incorporating the Mat hold pattern into a trading strategy, it is essential to conduct thorough backtesting and historical analysis. This involves analyzing past price data and identifying instances where the pattern occurred and how it played out. By studying the performance of the pattern in different market conditions and timeframes, traders can gain valuable insights into its strengths and weaknesses. This empirical evidence can help in determining when to trust or disregard the Mat Hold signal.

While the Mat Hold pattern can be a reliable trading indicator, it is crucial to understand its limitations and use it in conjunction with other technical analysis tools. By considering market conditions, timeframe considerations, confirming with other indicators, analyzing volume, and conducting thorough historical analysis, traders can make more informed trading decisions and increase their chances of success. Remember, no single indicator is foolproof, and a holistic approach to trading signals is essential for consistent profitability in the dynamic world of financial markets.

7. How to Recognize and Trade Different Types of Mat Hold Patterns?

The mat hold pattern is a type of candlestick pattern that indicates a continuation of the existing trend. It consists of a long candlestick followed by three or four smaller candlesticks that move against the trend, but stay within the range of the first candlestick. The pattern is completed by a fifth candlestick that resumes the trend and closes above the high of the first candlestick for an uptrend, or below the low of the first candlestick for a downtrend.

The mat hold pattern is similar to the rising three methods or the falling three methods, but it has some distinctive features that make it more reliable and less prone to false signals. In this section, we will explore the variations of the mat hold pattern and how to recognize and trade different types of mat hold patterns. Some of the factors that we will consider are:

1. The size and direction of the first candlestick. The first candlestick should be long and in the direction of the trend. It should also have a small or no upper shadow for an uptrend, or a small or no lower shadow for a downtrend. This indicates a strong momentum and a clear trend direction.

2. The number and position of the intervening candlesticks. The intervening candlesticks should be three or four in number and should move against the trend, but stay within the range of the first candlestick. They should also have small bodies and long shadows, indicating indecision and consolidation. The intervening candlesticks should not close below the open of the first candlestick for an uptrend, or above the open of the first candlestick for a downtrend. This indicates that the trend is still intact and the pullback is temporary.

3. The size and direction of the fifth candlestick. The fifth candlestick should resume the trend and close above the high of the first candlestick for an uptrend, or below the low of the first candlestick for a downtrend. It should also have a long body and a small or no upper shadow for an uptrend, or a small or no lower shadow for a downtrend. This indicates a strong confirmation and a continuation of the trend.

Depending on these factors, we can identify different types of mat hold patterns, such as:

- bullish mat hold pattern: This pattern occurs in an uptrend and signals a continuation of the bullish trend. It consists of a long white candlestick followed by three or four smaller black candlesticks that stay within the range of the first candlestick. The pattern is completed by a fifth white candlestick that closes above the high of the first candlestick. An example of a bullish mat hold pattern is shown below:

![Bullish mat hold pattern]

- Bearish mat hold pattern: This pattern occurs in a downtrend and signals a continuation of the bearish trend. It consists of a long black candlestick followed by three or four smaller white candlesticks that stay within the range of the first candlestick. The pattern is completed by a fifth black candlestick that closes below the low of the first candlestick. An example of a bearish mat hold pattern is shown below:

![Bearish mat hold pattern]

- Strong mat hold pattern: This pattern is a variation of the bullish or bearish mat hold pattern, but it has a stronger signal and a higher probability of success. It occurs when the first candlestick is very long and has a small or no upper shadow for an uptrend, or a small or no lower shadow for a downtrend. The intervening candlesticks are also very small and close near the open of the first candlestick. The fifth candlestick is also very long and closes far above the high of the first candlestick for an uptrend, or far below the low of the first candlestick for a downtrend. An example of a strong bullish mat hold pattern is shown below:

![Strong bullish mat hold pattern]

- Weak mat hold pattern: This pattern is a variation of the bullish or bearish mat hold pattern, but it has a weaker signal and a lower probability of success. It occurs when the first candlestick is not very long and has a large upper shadow for an uptrend, or a large lower shadow for a downtrend. The intervening candlesticks are also not very small and close near the high of the first candlestick for an uptrend, or near the low of the first candlestick for a downtrend. The fifth candlestick is also not very long and closes slightly above the high of the first candlestick for an uptrend, or slightly below the low of the first candlestick for a downtrend. An example of a weak bearish mat hold pattern is shown below:

![Weak bearish mat hold pattern]

To trade the mat hold pattern, we can use the following guidelines:

- We should look for the mat hold pattern in a clear and established trend, preferably after a strong breakout or a significant pullback.

- We should confirm the pattern with other technical indicators, such as volume, trend lines, moving averages, or oscillators.

- We should enter the trade when the fifth candlestick closes above the high of the first candlestick for an uptrend, or below the low of the first candlestick for a downtrend.

- We should place a stop loss below the low of the first candlestick for an uptrend, or above the high of the first candlestick for a downtrend.

- We should exit the trade when the trend reverses or when we reach our target profit.

The mat hold pattern is a reliable indicator that can help us identify and trade the continuation of a trend. By understanding the variations of the mat hold pattern and how to recognize and trade different types of mat hold patterns, we can improve our trading performance and reduce our risk. However, we should always remember that no pattern is 100% accurate and we should use other tools and methods to confirm our analysis and decisions. Happy trading!

: [Mat Hold Candlestick Pattern]

: [Mat Hold Pattern – How to Trade the Mat Hold Candlestick Pattern]

: [Mat Hold Pattern]

8. How to Apply the Mat Hold Strategy in Real-World Scenarios?

In this section, we will delve into the fascinating world of the Mat Hold pattern and explore its applications in real-world trading scenarios. The Mat Hold pattern, also known as the Rising Three Methods, is a powerful and reliable indicator that can provide valuable insights into market trends and potential trading opportunities. By understanding how to apply this pattern in different situations, traders can enhance their decision-making process and potentially improve their trading outcomes.

1. Definition and Formation:

The Mat Hold pattern is a continuation pattern that occurs within an uptrend. It consists of a long bullish candlestick, followed by a series of smaller bearish candles, which are contained within the range of the initial bullish candle. This pattern suggests that the market is taking a breather before continuing its upward movement, and it often signifies a strong bullish sentiment.

2. Psychological Interpretation:

From a psychological standpoint, the Mat Hold pattern reflects a temporary pause in the market's upward momentum. It indicates that after a significant bullish move, traders are reassessing the situation and consolidating their positions. This consolidation phase can be seen as a period of indecision and profit-taking, which may lead to a subsequent continuation of the uptrend.

3. Confirmation and Validation:

To validate the presence of a Mat Hold pattern, traders should look for certain characteristics. Firstly, the initial bullish candle should have a substantial body, indicating strong buying pressure. Secondly, the subsequent bearish candles should have relatively small bodies and preferably long lower shadows, suggesting limited selling pressure and potential buying interest. Confirmation of this pattern can be sought through technical tools such as trendlines, support and resistance levels, or other complementary indicators.

4. real-World scenarios:

Let's explore some examples to better understand how the Mat Hold pattern can be applied in real-world trading scenarios:

A. Stock Market: Imagine a scenario where a particular stock has been steadily climbing in price for several weeks. Suddenly, the stock experiences a sharp rally, represented by a long bullish candle. Following this, the stock enters a consolidation phase, marked by smaller bearish candles contained within the range of the initial bullish candle. Traders who identify this Mat Hold pattern may interpret it as a sign of temporary profit-taking and a potential continuation of the upward trend. This insight could prompt them to enter or hold onto their long positions, anticipating further upside movement.

B. forex market: In the forex market, the Mat Hold pattern can also provide valuable signals. For instance, consider a currency pair that has been in a prolonged uptrend. After a strong bullish move, the pair enters a consolidation phase with smaller bearish candles contained within the range of the initial bullish candle. Forex traders who recognize this pattern may interpret it as an opportunity to add to their existing long positions or consider entering new positions, expecting the uptrend to resume.

C. Cryptocurrency Market: The Mat Hold pattern can be observed in the cryptocurrency market as well. For example, let's say a popular cryptocurrency experiences a significant price surge, followed by a period of consolidation with smaller bearish candles contained within the range of the initial bullish candle. Crypto traders who identify this pattern may interpret it as a potential opportunity to buy or hold onto their positions, anticipating a continuation of the upward trend.

The Mat Hold pattern is a valuable tool that can assist traders in identifying potential trading opportunities within an uptrend. By understanding the formation, psychological interpretation, and real-world applications of this pattern, traders can enhance their decision-making process and potentially improve their trading outcomes. So, keep an eye out for the Mat Hold pattern, as it may just unlock new possibilities in your trading journey!

9. How to Master the Mat Hold Pattern and Enhance Your Trading Performance?

The mat hold pattern is a reliable indicator that can help traders identify and profit from bullish trends in the market. It is a continuation pattern that consists of four candlesticks: a long white candlestick, followed by three small black candlesticks that form within the range of the first candlestick, and then another long white candlestick that closes above the previous high. The mat hold pattern signals that the buyers are still in control of the market, despite some minor pullbacks, and that the uptrend is likely to resume. In this section, we will discuss how to master the mat hold pattern and enhance your trading performance. Here are some tips and insights that you can use:

1. Look for a strong uptrend before the mat hold pattern. The mat hold pattern is more reliable when it appears after a strong and consistent uptrend, as it indicates that the buyers have a lot of momentum and confidence. A strong uptrend can be identified by higher highs and higher lows, rising moving averages, and bullish volume. For example, in the chart below, the mat hold pattern appears after a strong uptrend that lasts for several weeks.

2. Use other technical indicators to confirm the mat hold pattern. The mat hold pattern can be confirmed by other technical indicators that support the bullish scenario. For instance, you can use trend lines, support and resistance levels, Fibonacci retracements, and oscillators to identify potential entry and exit points, as well as to measure the strength and direction of the trend. For example, in the chart below, the mat hold pattern is confirmed by a rising trend line, a support level at the 50% Fibonacci retracement, and a bullish divergence in the MACD histogram.

3. Wait for the breakout of the fourth candlestick. The mat hold pattern is completed when the fourth candlestick closes above the high of the first candlestick, indicating that the buyers have overcome the sellers and pushed the price higher. This is the signal to enter a long position, as it suggests that the uptrend will continue. You can place a stop-loss order below the low of the pattern, or below the nearest support level, to protect your trade from a reversal. You can also set a target price based on the height of the pattern, or use a trailing stop to capture the maximum profit. For example, in the chart below, the mat hold pattern is confirmed by a breakout of the fourth candlestick, which triggers a long entry. The stop-loss is placed below the low of the pattern, and the target price is set at the same distance as the height of the pattern.

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