A Bearish Belthold is very similar to the Black Marubozu pattern, opening at the candle high, falling to close near its low. This is what leaves the small lower shadow at the bottom of the candle. To learn more, check out the video below:
What is a Bearish Belthold
The Bearish Belthold pattern will plot during a up-trend with a large candle opening at its high, falling to close near the low. The pattern does not have an upper shadow and only a small wick towards the bottom of the candle. It is also required that the prior bar was an up-close.
To determine the large body requirement, a minimum threshold has to be met. This is done by making a comparison to the average bar size found in the reference period. The minimum large body threshold, as well as the reference period used to establish the average, are adjustable.
You may furthermore modify the lower wick requirement for the Bearish Belthold, by default defined as being relatively small. The maximum permitted ratio is calculated by dividing the lower shadow by the body range. This setting is also adjustable via the indicator dialogue box.
When identified as a reversal, the Bearish Belthold will occur during a minor up trend. The swing trend trend bias specifications are user selectable via the indicator dialogue box, as per the deviation type and multiplier settings. The bullish equivalent of this pattern is the Bullish Belthold.
Being one bar patterns, they may plot quite frequently. It is therefore not the most reliable when used without additional technical indicators. For example, one may improve the statistical probability by combining with certain trend filters such as a moving average, the Donchian Channel and key support levels, such as the daily pivots.
More information on combining other technical indicators with candlestick patterns available here.
Other bearish candlestick patterns
Other bearish candlestick patterns include the bearish engulfing, bearish harami, bearish harami cross, black marubozu, dark cloud cover, shooting star, gravestone doji, hanging man, evening star, evening doji star, long black candle, tweezers top, three black crows and the falling three methods.
All of the above patterns may be identified with our candlestick pattern indicator for NinjaTrader 8. Check out the LizardIndicators Premium Section for more information.
