Little or no upper wick. After a stretch of bullish candlesticks, a strong bearish candle forms. The bearish candle opens at the days high and closes significantly lower. The result is a long red candlestick with a short lower wick or no wick at all. This may signify a bearish trend ahead. The formation occurs frequently but is often incorrect in predicting future trend. To a degree the significance of the formation is fairly obvious; an uptrend is broken by a strong days move. Thus the larger the red candle, the stronger the likelihood of reversal. Traders will typically wait for further confirmation. The non-FX market formation requires a large gap not possible in more efficient foreign exchange markets. Thus many argue that Bearish Belt Holds are simply not possible in FX, and the watered down Foreign Exchange version above should be overlooked for other more significant indicators.
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