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Cup And Handle

7 Best Chart Patterns For Trading Forex and Gold If you are studying chart parts, I prepared for you the list of 7 price action patterns you should never miss. In this article, I will share with you powerful chart patterns for trading forex or any other financial market. These patters work perfectly for day trading, swing trading and scalping. We will study real market examples. I will explain the psychology and meaning of each pattern and explain to you how to trade them. The first chart pattern that we will discuss is double top. The pattern is formed on the edge of a bullish impulse. It is based on 2 equal highs and a higher low between them. A higher low composes a minor support. A strong bearish signal is a breakout of a neckline and a candle close below that. Entry is on its retest. Stop loss is above the highs. Target is the closest strong support. The bullish version of a double top pattern is called double bottom The pattern is formed on the edge of a bearish impulse. It is based on 2 equal lows and a lower high between them. A lower high composes a minor resistance. A strong bullish signal is a breakout of a neckline and a candle close above that. Entry is on its retest. Stop loss is below the lows. Target is the closest strong resistance. The second powerful pattern is a descending triangle formation. The pattern is formed on the edge of a bullish impulse. It is based on at least 2 equal lows and 3 lower highs between them. A falling trend line should respect the lower highs. A strong bearish signal is a breakout of a neckline and a candle close below that. Entry is on its retest. Stop loss is above the highest high. Target is the closest strong support. A bullish variation of a triangle pattern is called an ascending triangle. The pattern is formed on the edge of a bearish impulse. It is based on at least 2 equal highs and 3 higher lows between them. A rising trend line should respect the higher lows. A strong bullish signal is a breakout of a neckline and a candle close above that. Entry is on its retest. Stop loss is below the lowest low. Target is the closest strong resistance. Chart pattern number 5 - Cup & Handle pattern. Cup & handle pattern is the variation of a double bottom. The only difference between 2 patterns is 1 lower low and a consequent higher low, instead of 2 equal lows. Entry trigger and trade execution rules are absolutely the same as with a double bottom. Stop loss is strictly below the lower low. A bearish version of a cup & handle is called an inverted cup & handle. Inverted cup & handle pattern is the variation of a double top. The only difference between 2 patterns is 1 higher high and a consequent lower high, instead of 2 equal highs. Entry trigger and trade execution rules are absolutely the same as with a double top. Stop loss is strictly above the higher high. The last and the most powerful chart pattern is the range . Range is a strictly horizontal parallel channel where the price sets equal highs and equal lows, respecting the support and the resistance of the range. This chart pattern signifies that the market found equilibrium, a fair value. A strong bullish signal is a breakout of a resistance of the range and a candle close above that. Target will be the next strong resistance, stop loss should lie below the lows of the range. A strong bearish signal is a breakout of a support of the range and a candle close below that. Target will be the next strong support, stop loss should lie above the highs of the range. Of course, there are more patterns to study but these 7 are essential . Your ability to recognize them is the key for accurate price action trading. Learn to spot these patterns and good luck in your trading.. Let me know which patterns do you want to study in the next article. ❤️Please, support my work with like, thank you!❤️
OANDA:XAUUSDEducation
by VasilyTrader
2
How To Identify and Trade a Cup & HandleThe Cup & Handle Pattern: A Comprehensive Guide to Continuation Mastery In the vast realm of technical analysis, the Cup & Handle pattern emerges as a brilliant beacon of insight—an extraordinary exemplar of a continuation pattern that elegantly unveils the ongoing momentum within an established trend. Its inherent elegance lies in its unparalleled ability to furnish traders with a tangible roadmap, skillfully guiding them through the intricate symphony of price action. As we embark on this enlightening journey of exploration, we shall unveil the multifaceted layers of the Cup & Handle pattern. Our expedition involves an in-depth dissection of its core components, a profound interpretation of its implications, and an unveiling of the critical elements that lend credence to its presence. 1. Cup Formation: The Artful Pause That Speaks Volumes Nestled at the heart of the Cup & Handle pattern is the captivating creation of the cup formation—a graceful curve that mirrors the contours of a masterfully sculpted cup. This stage encapsulates a momentary respite, a purposeful consolidation within the overarching trend. It embodies a pause that echoes the collective sentiment of market participants, offering a tangible representation of forces seeking equilibrium. The gentle curvature of the cup resonates with the rhythm of the market, seamlessly weaving together the intricate interplay between demand and supply. 2. Handle Formation: The Prelude to Anticipation Following the organic embrace of the cup, the handle formation emerges—an intriguing prelude that tantalizingly hints at the future. This segment assumes the shape of a concise consolidation, often resembling a brief pullback or a tranquil sideways drift. The handle, akin to a contemplative interlude in a symphonic composition, captures a moment of introspection. It's akin to a traveler pausing at a vantage point, surveying the terrain before embarking on the next phase of their journey. During this introspective intermission, market participants recalibrate their strategies, absorbing insights for the forthcoming movement. Interpreting the Pattern: Guiding Continuation with Finesse The Cup & Handle pattern serves as a reliable navigational instrument within the ongoing narrative of a trend: • Bullish Narratives: In an upward trajectory, the Cup & Handle encapsulates the very essence of continuity. It signifies the unwavering persistence of the prevailing uptrend, elegantly supported by the inherent flow of the pattern's organic formation. Validation Through Breakout and Volume: • Breakout Confirmation: The core of the Cup & Handle pattern's credibility hinges upon the breakout above the handle's upper boundary, often referred to as the resistance level. This pivotal juncture serves as a luminous beacon, illuminating potential entry points and validating the pattern's existence. • Volume as a Harmonic Undertone: Volume analysis lends a harmonious undertone to the pattern's melody. Attentive observation of volume trends during the cup and handle stages adds a resonant chord. Heightened volume during the cup formation, followed by a gentle cadence during the handle, amplifies the pattern's authenticity. • Projection and Beyond: Navigating the Path Ahead • Projected Price Targets: Peer into the future by projecting potential price targets above the neck line breakout. The symphony of Fibonacci levels—62%, 79%, 100%, 127%, and 162.7%—composes a harmonious ensemble of potential completion points. • Harmonizing Analysis: Synthesize your findings with the broader market landscape. Overlay auxiliary technical tools, such as support and resistance levels, to orchestrate a harmonious fusion of analysis and fine-tune your trading decisions, • As we voyage further into the intricate domain of technical analysis, the Cup & Handle pattern takes on a persona beyond mere lines on a chart. It becomes a living embodiment of the intricate dialogue between market psychology and the ebb and flow of price dynamics. In your arsenal as a trader, it functions as a steadfast compass, guiding you with its radiant light through the intricate labyrinth of trends. This is your roadmap to navigating the captivating odyssey of continuation. "Cup & Handle Unveiled: Mastering Continuation Strategies with TCPLTP"
Education
by TradeChartPatternsLikeThePros
1
Mastering the Cup and Handle Pattern in Forex and Gold Trading In the world of forex and gold trading, recognizing chart patterns can be your key to unlocking profitable opportunities. One such pattern, the Cup and Handle, offers traders a powerful tool for identifying potential bullish trends. In this comprehensive article, we'll explore how to identify and trade the Cup and Handle pattern in both forex and gold markets. We'll provide real-world examples to help you navigate these exciting trading opportunities. Understanding the Cup and Handle Pattern The Cup and Handle is a bullish continuation pattern that resembles the shape of a teacup. It consists of two main parts: 1. Cup: The first part forms a rounded bottom, resembling a cup. It typically follows a downtrend and represents a period of consolidation. 2. Handle: The second part is a smaller consolidation or retracement, forming a downward-sloping channel or flag pattern. It resembles the handle of a cup. Identifying the Cup and Handle Pattern To identify and trade the Cup and Handle pattern, follow these key steps: 1. Downtrend: Look for a significant downtrend that precedes the formation of the Cup and Handle pattern. 2. Cup Formation : The cup should be a rounded bottom, indicating a period of consolidation or accumulation. The depth of the cup can vary, but it should generally resemble a "U" shape. 3. Handle Formation: After the cup, there should be a smaller consolidation or retracement forming a downward-sloping channel or flag pattern. This is the handle of the cup. 4. Volume Analysis: Analyze volume trends. Typically, there is a decrease in volume during the handle formation, signaling a temporary pause in the trend. 1. Forex - EUR/USD: 2. Gold - XAU/USD: Trading Strategies 1. Entry Point: Enter a trade when the price breaks out above the handle's upper boundary. This breakout confirms the bullish sentiment. 2. Stop-Loss: Place a stop-loss order below the handle's lower boundary to manage risk. 3. Take Profit: Estimate the potential price target by measuring the distance from the cup's bottom to the handle's breakout point and then adding it to the breakout level. The Cup and Handle pattern is a valuable tool for identifying potential bullish trends in both forex and gold markets. By understanding its components and following a structured trading approach, you can leverage this pattern to make informed trading decisions and potentially unlock profitable opportunities in your trading journey. 🏆📈💰 Please, like this post and subscribe to our tradingview page!👍
COINBASE:BTCUSDEducation
by EliteTradingSignals
5
Learn How to Trade Cup and Handle (rare but profitable pattern)☕ If you are studying a price action, you should definitely know Cup and Handle formation. Being applied properly, it can generate big profits. In this educational article, I will teach you how to identify this pattern. We will discuss its psychology and I will share with you 2 trading strategies. 📏And let's start with the structure of the pattern. The pattern has 3 important elements: Cup - long-term correctional movement that tends to move steadily from a bearish trend to a bullish trend. Handle - short-term correctional movement with signs of bullish strength. Neckline - upper horizontal boundary of the pattern - a strong resistance that the price constantly respects. ⚠️Being formed, it warns you about a highly probable coming bullish movement. The trigger that confirms the initiation of a bullish wave is a breakout of the neckline of the pattern and a candle close above. Here is the example of a completed C&H with a confirmed neckline breakout, indicating a highly probably coming bullish movement. Depending on the preceding price action, Cup & Handle Pattern can either be a trend-following or reversal pattern. 📉If the pattern is formed after a bearish impulse. It is considered to be a reversal pattern. Here is the example of a reversal C&H that I spotted on EURUSD. 📈If the pattern is formed at the top of a bullish impulse, it is considered to be a trend following pattern. Here is the example of a trend following C&H that I spotted on GBPJPY Index. The thing is that while the price forms the C&H, buying volumes are accumulating. Even though, buyers are hesitant and reluctant initially, their confidence grows, and the accumulation leads to explosive neckline breakout. There are 2 strategies to trade this pattern. ✔️Strategy 1. That approach is quite risky, but the reward can be quite substantial. You should monitor the price action when the price is forming a handle. Occasionally, the price starts trading in a falling channel: parallel or contracting one. Your trigger will be a bullish breakout of its resistance and a candle close above. Once the violation is confirmed, you can buy aggressively or set a buy limit order on a retest. Stop loss will lie below the lows of the channel. Target will be the closest key resistance. Here is the example of the handle being a falling channel. 📍Strategy 2. Wait for a breakout of a neckline of the pattern. Once a candle closes above that, it will confirm the violation. Buy the market aggressively or set a buy limit on a retest of a broken neckline then. Stop loss will lie below the lows of the handle. Target will be the closest key resistance. Here is the example of the trade based on a confirmed breakout of a neckline of C&P on NASDAQ Index. Applied properly, the strategies may reach up to 70% win rate. As always, the best pattern will be the one that forms on a key level. Try it, test it, and good luck in your trading journey. ❤️Please, support my work with like, thank you!❤️
OANDA:XAUUSDEducation
by VasilyTrader
9
Cup and Handle Trading Guide ☕️ The cup and handle pattern is a continuation chart pattern that looks like cup and handle with a defined resistance level at the top of the cup. It forms from a strong drive up that pulled back and consolidated over a period of time creating the cup before making another push to the resistance where it pulls back again but not as far creating the handle and then makes it final push past the resistance level and continuing on the trend. How To Trade A Cup and Handle Pattern To trade using a cup and handle strategy, place your stop buy order a little higher than the handle’s upper trend line. Your order will only execute if the price breaks through the pattern’s resistance. As an alternative you can wait for the price to close higher than the handle’s upper trend line, and then place a limit buy order a little bit lower than the breakout level for the pattern, which will execute if the price retraces. However, you will face the risk of missing the trade if the price fails to pullback and continues to advance uninterrupted. 💫Useful tips: The ideal cup pattern should not be too deep. Avoid patterns with handles that are too deep as well, since the handles should be forming somewhere in the cup pattern’s top half. The volume should be decreasing as the price declines, and then stay lower than the average seen in the base of the cup. The price should increase as the security starts to move higher toward the previous high. The retest at the end of the cup pattern does not need to directly reach the previous high, but the further the top of the handle is from the old high, the less significant the breakout from the handle’s bottom may be. Hey traders, let me know what subject do you want to dive in in the next post?
OANDA:XAUUSDEducation
by TopTradingSignals
5
📊 Understanding the Cup and Handle PatternA cup and handle is a technical analysis pattern that appears on a chart as a U-shaped pattern, followed by a small downward drift, resembling a handle. It is important to note that like all technical analysis patterns, the cup and handle pattern is not a guarantee of future price movements and should be used in conjunction with other analysis techniques. 📈Cup and Handle It is considered a bullish pattern and is often used by traders to indicate the potential for an upcoming price increase. The pattern is formed when the price of a security falls, reaches a bottom, and then rises back up to near its previous high before falling again. The downward drift that follows is the handle. The pattern is considered complete when the price breaks through the resistance level (the top of the cup) and continues to rise. Technical traders using this indicator should place a stop buy order slightly above the upper trendline of the handle part of the pattern. 📉Inverted Cup and Handle After the cup forms and the beginning of a noticeable handle takes shape, begin to monitor trading volume closely. One way to think of the inverted handle is a follow-up to an inverted cup. The inverted handle retraces the initial move, but not to the level of the original trend. Once you see a retracement in the form of an inverted handle of the original inverted cup pattern, setting a stop loss while selling the trend could be a potential trade idea. 👤 @algobuddy 📅 Daily Ideas about market update, psychology & indicators ❤️ If you appreciate our work , Please like, comment and follow ❤️
Education
by QuantVue
🟨 Cup and Handle Pattern - cheat sheetWhat is the Cup and Handle Pattern? One of the most important chart patterns in the stock market is the Cup and Handle Pattern, invented by William O’Neill. Sometimes you might see it abbreviated as CWH. It also holds the crowd proclaimed title as one of the most profitable and reliable breakout patterns. The Cup and Handle Pattern forms as a bullish continuation pattern that can be found during strong trend. –––––––––––––––––––––––––––––––––––– Is Cup and Handle Pattern Bullish? William O'Neil cup and handle patterns represent bullish continuation patterns that mark consolidation periods which are followed by breakouts. This pattern includes two components: cup and handle . After advancing, this cup is formed in a bowl shape or with a rounded bottom. Handle forms in the upper third of the cup. –––––––––––––––––––––––––––––––––––– Stages of a Cup and Handle Pattern Formation Stage 1 Setup: The pattern starts when a price raises from a former base, making the prior trend a bullish trend. At some the profit taking starts taking place and the stock begins the decline, forming the high of the cup. The high of the cup is also called the ‘Left Cup’ Stage 2: Decline: The stock starts to form a new base. It is normal to see above average volume at the beginning of the decline. The volume element is important since it ensures that later buyers to the party are out of the stock and do not provide an overhead supply. By the end of Stage 2 the volume would have fallen below average. This low trading volume is combined with price consolidation around the low of the cup. Stage 3 Recovery: The stock starts to recover and the volume on up days starts to pick up. This indicates that institutions are taking interest in the stock. Pro tip: look for low volume on down days. Now we still have a few more types of players into the stock: the bottom fishers who bought in at the low of the cup and the bag holders who have bought at the high of the cup and have been sitting on a loss. As the stock price moves up, these would partially close their positions making the recovery process a stair stepping process rather than a V shaped recovery. As the price reaches close to the High of the cup, the last bag-holders will cut their losses and will create a large volume sell-off. At this point the “Pivot” is formed or the “High of the Handle”. Stage 4 Consolidation: After the High of the handle, the price is likely to continue its handle formation. The handle pattern occurs as there are still weak hands in the ticker. A shakeout preferably on higher volume is considered a bullish continuation in the cup and handle pattern formation . This indicates that all overhead supply is depleted. The point when the price starts to climb again and reaches the high of the handle is the breakout point. We will look for a to price breaks on higher volume to indicate that institutions have taken control of the stock and that the sky is clear to move upwards. A rule of thumb is to look for a price target with the same value as the prior advance from previous base as the one subsequent to Stage 1. –––––––––––––––––––––––––––––––––––– Hope this helps! Example of Cup and Handle on AAPL from 2003
Education
by TintinTrading
1
Learn Cup & Handle Pattern | Profitable Trading Strategy For Beg A Cup and Handle is a bullish continuation chart pattern that marks a consolidation period followed by a breakout. Chart patterns form when the price of an asset moves in a way that resembles a common shape, like a rectangle, flag, pennant, head and shoulders, or, like in this example, a cup and handle. There are two parts to this chart pattern: The cup The handle The cup forms after a downtrend and is followed by an uptrend and looks like a bowl or rounding bottom. As the cup is completed, the price trades sideways, and a trading range is established on the right-hand side and the handle is formed. A breakout from the handle’s trading range signals a continuation of the previous uptrend. The cup should resemble a bowl or rounding bottom. The perfect pattern would have equal highs on both sides of the cup, but in the real world, just like when finding someone to marry, perfect doesn’t exist. After the high forms on the right side of the cup, there is a pullback that forms the handle. The handle is the consolidation before the breakout. The handle needs to be smaller than the cup. The handle should not drop into the lower half of the cup, and ideally, it should stay in the upper third. If the Cup and Handle pattern completes successfully, the price should break above the trend established by the “handle” and go on to reach new highs. The buy point occurs when the asset breaks out or moves upward through the old point of resistance (right side of the cup). Please, like this post and subscribe to our tradingview page!👍
Education
by EliteTradingSignals
7
Volatility Contraction PatternJS-Masterclass #4: The Volatility Contraction Pattern The Volatility Contraction Pattern (VCP) is a vital concept for successful traders and a key element in our JS-TechTrading strategy. In this tutorial, we will cover the following: 1. Why is it important? 2. The ‘Overhead Supply’ Concept 3. How to identify a VCP? 4. The Perfect Entry Point 1. Why is it important? The Volatility Contraction Pattern (VCP) allows us to find stocks which are getting ready to form a very specific low risk entry point at which the potential reward of our trades outweigh the risk. The main role that VCP plays is establishing a precise entry point at the line of least resistance. If a stock is under accumulation (large institutions putting their money into the stock), a price consolidation represents a period when strong investors ultimately absorb weak traders. Once the “weak hands” have been eliminated, the lack of ‘overhead supply’ (explanation see below) allows the stock to quickly move higher because even a small amount of demand will overwhelm the negligible inventory. This is referred to as the line of least resistance. Tightness in price from absolute highs to lows and tight closes with little change in price from one day to the next and also from one week to the next can generally found in constructive Volatility Contraction Patterns. These tight areas should be accompanied by a significant decrease in trading volume. 2. The ‘Overhead Supply’ Concept Any price action in the stock market is the simple result of supply and demand, just like in any other business. If demand is bigger than the supply, the price goes up. If supply outweighs demand, prices are falling, it is as simple as that! What happens to supply and demand in a Volatility Contraction Pattern? Point 1: Traders buying at point 1 in the graphic are called ‘Trapped Buyers (TBs)’. Point 2: the price has fallen and many people think the stock is ‘cheap’ at this price and buy the stock – the so called ‘Bottom Fishers (BFs)’ provide the relevant demand needed to trigger a price increase. Point 3: the price has come back up to the level at point 1. Now two things happen a) The Trapped Buyers who bought a price level 1 are very happy to get out of the trade at breakeven after having had paper losses at point 2. The cut their losses (LC) and provide the relevant supply to the market needed to trigger a declining price. b) The Bottom Fishers take nice quick profits and sell their stocks, providing additional supply to the market which adds to the decline in price. Points 4, 5, 6: The same concept applies here but as time goes by, the volatility contracts from left to right as fewer and fewer traders provide their demand and supply to the market, the price action dries out like a towel: 3. How to identify a VCP? A common characteristic of virtually all constructive price structures (those under accumulation) is a contraction of volatility, from greater volatility on the left side of the price base to lesser volatility on the right side in the chart. This pattern needs to be accompanied by specific areas in the base structure where volume contracts significantly: Let’s look at an example: In this example, we are seeing a total of 5 contractions from left to right, starting from 1 (ca. 25% decline) to 5 (< 5% decline) under significantly reduced trading volume. This is exactly what we want to see. At the final base 5, supply has stopped coming to market which is the reason for the low trading volume in this time-period. Due to the lack of supply, only very few demand is needed to push the price significantly higher. We therefore have a high probability of an explosive price increase. Also, we can set our SL just below the final base at 5 which means that our max. risk for this trade is < 5% - our potential reward significantly outweighs our risk. 4. The Perfect Entry Point When the price breaks out of the right side of the final base under higher volume, we have a perfect entry point. As the supply has stopped coming to market, only little demand is needed to cause an explosive price move upwards. Furthermore, the volatility contraction results in a tight base at the right end of the pattern resulting in a low risk entry point – the Stop-Loss can be set under the low of the latest base structure on the right side of the pattern which is normally in the range of about 5% risk. This is a vital concept for successfully timing the continuation of an existing trend.
Education
by JS_TechTrading
2
CUP & HANDLE. How the pattern works☕️ ✅This pattern is not as popular among traders as "Head and Shoulders", "Double Top" and other classic patterns of technical analysis. However, this does not mean that it is not so effective. In fact, the "Cup & Handle" pattern is in no way inferior to the above patterns in its reliability and, if used correctly, can bring considerable benefits to the trader. ✅Below we will look at how the "Cup & handle" is formed, what are the signs of authenticity of the formed pattern, and the trading strategy for it. ⚠️How the "Cup & Handle" formation is formed The formation of this pattern occurs on an uptrend and is a sure sign of its continuation (subject to the conditions of authenticity of the pattern). In essence, it is a cup - an uptrend correction. The price reaches a strong resistance level, cannot overcome it, and smoothly rolls back, forming the left wall of the cup. Then it smoothly unfolds along the bottom and rises to test the level again. Having reached the level, it rolls back down again. This rollback should be much smaller than the previous one, and it forms a handle. The handle of the cup is very often formed in the form of a "Flag" pattern. The "Cup & handle" pattern is considered fully formed when the price, having formed a "handle", returns up and breaks through the resistance level from which the pattern formation began ⚠️Confirmation of the truth of the "Cup & handle" pattern There are several conditions, without which the formed pattern cannot be considered true. These are the conditions: 1️⃣To begin with, as mentioned above, for the formation of this pattern, it is necessary to have an uptrend. Without a trend, there is no point in looking for this formation on the price chart, because even if you find a drawing of an ideal cup with a handle, it will be just a drawing that has no meaning. 2️⃣The depth of the forming cup should not exceed 2/3 of the height of the previous uptrend. The optimal depth of the cup is within 1/3 - 2/3 of this value. The depth of the forming handle should not exceed a value equal to ½ of the depth of the cup. 3️⃣The most reliable is the "Cup & Handle" pattern formed on daily or weekly timeframes. Of course, it can also be formed on hourly charts, but where the probability of its triggering is somewhat lower. 4️⃣The "Cup & handle" pattern should be confirmed by the indicators of the volume indicator. Volumes should grow at a time when the price is moving in the direction of an uptrend and fall when it decreases. Also, a sharp surge in volume should accompany the moment of breaking through the price level at the end of the formation of the figure. 🟢Trading strategy based on the "Cup & handle" The entry into the position is carried out after the completion of the formation of the figure. It is recommended to wait for the price to close above the resistance line. To do this, you must constantly monitor the schedule in anticipation of the right moment. There is also a strategy for opening a position on a pending order, in which case there is no need to sit and wait for the completion of the figure. A pending order is placed at a level slightly above the resistance level (approximately 10 points) and is triggered if the figure is completed. The target level for this pattern is the height of the cup, laid up from the resistance level. Therefore, we set the profit-taking level of TAKE PROFIT either at the target level or 10-15 points below it. As for the STOP LOSS limit order, it should be placed at the level of the bottom of the handle (or slightly lower). ❗️In conclusion, I will say once again how important it is to correctly identify the "Cup and Handle" formation before you start trading on it. Carefully re-read the rules confirming this pattern. Try not to mess with the patterns formed on small timeframes. Take your time, be patient, and remember that the absence of open positions can also be considered an excellent position. ❤️ Please, support our work with like & comment! ❤️
OANDA:XAUUSDEducation
by UnitedSignals
6
Classic Trend Reversal Patterns📚 ✅It is difficult to overestimate the importance of the classic continuation and reversal patterns. For a real trader trading on the Forex market, it is huge, because these patterns make it possible to predict the behaviour of the price. ⚠️If one of the trend continuation patterns appears in front of us on the chart, it means that the usual correction (rollback) is taking place. After its completion, it becomes possible to profitably enter the market at the existing rate. 📈📉Head & Shoulders 🟢The Head and shoulders pattern is a reversal pattern that is usually formed during a bullish trend and creates a top — the first shoulder. After the correction, the price creates a higher top — the head. After the next correction, the price creates a third top, which is below the head — the second shoulder. So, we have two shoulders and a head in the middle. 🟢Of course, the head and shoulders reversal pattern has its inverse equivalent, which turns bearish trends into bullish ones. This pattern is called the Inverted Head and Shoulders pattern. 🟢Confirmation of the pattern occurs when the price breaks the line that runs through two bases on either side of the head. This line is called the neckline. When the price overcomes the neck line, we get a reversal signal. 📊Double Top and Double Bottom 🟢A double top consists of two peaks on the chart. These peaks are either at the same resistance level, or the second peak is slightly lower. A sample of a double top usually looks like the letter "M". 🟢A double top has its opposite, which is called a double bottom. This model consists of two bases, which are either located at the same support level, or the second base is slightly higher. The double bottom pattern usually looks like the letter "W". 🟢Confirmation of the Double top pattern comes at the moment when the price breaks through the minimum between the two tops. This level is marked by a line on the chart and is called a signal line. 🟢The stop loss order should be placed directly above the second top. The minimum profit target is equal to the distance between the neck and the center line that connects the two tops. ❗️The double bottom looks and works exactly the same. 💎Diamond 🟢It is quite difficult to see this pattern on a real chart – it looks like a standard flat, but with unstable volatility. A diamond means, at least, medium-term market uncertainty, when the probability of movement in any direction is almost the same. But the longer it takes to form, the stronger the breakdown and the subsequent trend will be. ☕️Cup with Handle 🟢The cup with handle pattern is considered a bullish continuation pattern, so it is necessary to determine the previous uptrend. This can be done by analyzing price dynamics or technical indicators, such as moving averages. The cup should be more U-shaped, not V-shaped, and the upper points on both sides of the cup should be approximately at the same level. ❤️ Please, support our work with like & comment! ❤️
Education
by UnitedSignals
10
Trading the cup and handle breakout ($ATOM) -18.02.22Ideal trading setup 1. round bottom with a small retracement What you would want to see on a classic cup and handle(cnh) is a nice round bottom with followed by a slight retracement. 2. Volume breakout After the formation of the cnh, the market will try to make a run, temporarily breaking the horizontal resistance. 3. Consolidation Even though the price drops at some point in this area, we see it bounce back up before breaking out of the consolidation zone. 4. Volume expansion on break out There is a significant increase in volume upon breakout, another good sign. 5. Breaking out of the consolidation This time around, we see the market trying to make another run up, and is eventually pulled back. 6.Volume expansion intact Although the market is dropping, we see the volume is still increasing. It is in form of a bearish candle, however since the movement happens inside a bullish channel, we can conclude that the increase is therefore bullish. 7. Bullish channel The price drops creates a bullish channels a bullish channel. I can see 4 waves in already (a-d). 8. The breakout Expecting to break out of the channel and eventually above of the consolidation ceiling thereby flipping resistance into support. If a resistance is tested several times, it weakens and the price will break through. 9. EMA squeeze and support We're looking for a crossover in EMAs (13, 21 55) withe the 55 acting as an overall support and the 21EMA running under the 13EMA. 10. Riding the wave. There are various ways of taking profits and everyone has their own preferences. Given one doesn't know when to take profits, the ideal exit will be when the price touches the 55EMA again, chances are by that time the EMAs might be flipping from being support and would now act as the resistance. Tip : You can add other tools like the MACD and the likes for better clarity. Note : This is a common alt coin breakout pattern, so it goes without saying that most coins at the moment are developing into this formation, only chose ATOM cause it was in my watchlist. Credits: @EmperorBTC Happy trading, due diligence is advised!
Education
by initmx
3
CUP & HANDLE. How the pattern works☕️ ✅This pattern is not as popular among traders as "Head and Shoulders", "Double Top" and other classic patterns of technical analysis. However, this does not mean that it is not so effective. In fact, the "Cup & Handle" pattern is in no way inferior to the above patterns in its reliability and, if used correctly, can bring considerable benefits to the trader. ✅Below we will look at how the "Cup & handle" is formed, what are the signs of authenticity of the formed pattern, and the trading strategy for it. ⚠️How the "Cup & Handle" formation is formed The formation of this pattern occurs on an uptrend and is a sure sign of its continuation (subject to the conditions of authenticity of the pattern). In essence, it is a cup - an uptrend correction. The price reaches a strong resistance level, cannot overcome it, and smoothly rolls back, forming the left wall of the cup. Then it smoothly unfolds along the bottom and rises to test the level again. Having reached the level, it rolls back down again. This rollback should be much smaller than the previous one, and it forms a handle. The handle of the cup is very often formed in the form of a "Flag" pattern. The "Cup & handle" pattern is considered fully formed when the price, having formed a "handle", returns up and breaks through the resistance level from which the pattern formation began ⚠️Confirmation of the truth of the "Cup & handle" pattern There are several conditions, without which the formed pattern cannot be considered true. These are the conditions: 1️⃣To begin with, as mentioned above, for the formation of this pattern, it is necessary to have an uptrend. Without a trend, there is no point in looking for this formation on the price chart, because even if you find a drawing of an ideal cup with a handle, it will be just a drawing that has no meaning. 2️⃣The depth of the forming cup should not exceed 2/3 of the height of the previous uptrend. The optimal depth of the cup is within 1/3 - 2/3 of this value. The depth of the forming handle should not exceed a value equal to ½ of the depth of the cup. 3️⃣The most reliable is the "Cup & Handle" pattern formed on daily or weekly timeframes. Of course, it can also be formed on hourly charts, but where the probability of its triggering is somewhat lower. 4️⃣The "Cup & handle" pattern should be confirmed by the indicators of the volume indicator. Volumes should grow at a time when the price is moving in the direction of an uptrend and fall when it decreases. Also, a sharp surge in volume should accompany the moment of breaking through the price level at the end of the formation of the figure. 🟢Trading strategy based on the "Cup & handle" The entry into the position is carried out after the completion of the formation of the figure. It is recommended to wait for the price to close above the resistance line. To do this, you must constantly monitor the schedule in anticipation of the right moment. There is also a strategy for opening a position on a pending order, in which case there is no need to sit and wait for the completion of the figure. A pending order is placed at a level slightly above the resistance level (approximately 10 points) and is triggered if the figure is completed. The target level for this pattern is the height of the cup, laid up from the resistance level. Therefore, we set the profit-taking level of TAKE PROFIT either at the target level or 10-15 points below it. As for the STOP LOSS limit order, it should be placed at the level of the bottom of the handle (or slightly lower). ❗️In conclusion, I will say once again how important it is to correctly identify the "Cup and Handle" formation before you start trading on it. Carefully re-read the rules confirming this pattern. Try not to mess with the patterns formed on small timeframes. Take your time, be patient, and remember that the absence of open positions can also be considered an excellent position. ❤️ Please, support our work with like & comment! ❤️
BITSTAMP:BTCUSDEducation
by UnitedSignals
11
TA 101: Ultimate Guide to The Cup and Handle PatternCup and Handle (for less volatile assets): 30% bull run before reaching the first high. 10-30% drop to the bottom of the cup. 10-15% drop to the bottom of the handle. Length of the cup should cover more than 50-100 bars. Bottom of the cup should not be a V shape. (deal breaker!) More than 50% deep cup is a sign of weakness for the pattern. Handle cannot go lower than the bottom of the cup. The bottom of the handle should be at least 15-30% higher than the cup. Volume profile: Volume should go up when price test the resistance the second time. Volume should go higher the third time price hits the resistance line. Volume should be lower while forming the cup. Red volume should not be too high or increasing. Volume profile is a deal breaker! For more volatile assets could have exaggerated numbers.
Education
by MarkitMaven
14
Inverted cup with handle: identification guidelines Feature Discussion Rounded turn Look for a smooth, rounded curve (an inverted cup), but allow exceptions. Cup rims The two cup rims should reach the bottom at close to the same price. Cup handle To the right of the cup there should be a handle. The cup's recoil handle should not rise above the top of the cup, but often tracks 30% to 60% above the height of the cup. Confirmation The pattern is confirmed as valid when the price closes below the right edge of the glass.
Education
by RNiedson
3
AAPL: Cup with Handle Base to study for Future tradesThis is used in conjunction with the Stocks Over Coffee Podcast on Technical Education Cup with Handles. Apple is the largest company in the world with a market cap of 2 trillion. This is no easy feat to accomplish but is there a way to get into a small company before it becomes a household name? There is! One just has to notice the cup and handle base and a few other things. First thing you want to make sure is the fundamentals are working. This means you want the company to be growing sales and earnings. This mean the company has a minimum of 25% sales and earnings for the last two quarters. Apple meets the earnings easily but sales can be forgiven since they are generating 100%+ increases quarter over quarter as shown below: Quarterly Sales Jun03: +8% Sep03: +19% Dec03: +36% EPS Quarterly Jun03: +300% Sep03: +433% Dec03: +350% Once the fundamentals are researched you want to make sure that there is a technical setup that is done by institutions. First you can look into the daily $ volume. if the daily $ volume has at least 40mm in activity per day then you can go to the next step or looking for the technical setup. In this tutorial we are looking for a cup with handle setup and Apple will be used for the tutorial. In the Cup with Handle base these are the criteria below: 1. Minimum 30% Prior up trend 2. Cup Base from 7 weeks to 65 weeks 3. Cup Depth below 30% 4. Handle Base with minimum 2 weeks 5. Handle Depth below 15% Once the check list is done then you can set your buy point. Once the buy triggers then you can confirm at the end of the day if the price is above the pivot point and if the volume is 50% above average. If both of these are great then at the end of the week on Friday you can check the weekly volume is also 50% above average volume then you are good to hold for two major sell rules. The two sell rules I use are 1. 25% Profit Target (CAGR of 115%) 2. Break Below 10 Week Moving Average (CAGR of 156%) 185% Profit Both of them did great on an annual basis and on a price adjusted yearly basis for this Apple play. How do you decide on the sell rules? It depends on your individual rules and psychology. Thank you for reading the write up.
NASDAQ:AAPLEducation
by HaleyZhao