Content<\/p>\n
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- Featured Video: The Double Bottom Pattern<\/a><\/li>\n
- Stock Trading<\/a><\/li>\n
- How to Identify Cup and Handle Pattern in Forex Trading<\/a><\/li>\n
- How successful is cup and handle pattern?<\/a><\/li>\n
- Trading Strategies<\/a><\/li>\n<\/ul>\n<\/div>\n
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This time, the cup prints a V-shape rather than a rounded bottom, with price stalling under the prior high. It ground sideways in a broadening formation (second blue box) that looks nothing like the classic handle for another three weeks and broke out. This rally failed to reach the measured move target at 50, calculated by adding the four-point depth of the cup to the resistance line near $46. The cup and handle is one of many chart patterns that traders can use to guide their strategy.<\/p>\n
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- There are several ways to approach trading the cup and handle, but the most basic is to look for entering a long position.<\/li>\n
- Ask a question about your financial situation providing as much detail as possible.<\/li>\n
- A 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.<\/li>\n
- The confirmation of this continuation pattern is due to the absence of divergence in price action and RSI.<\/li>\n
- Most traders watch for a breakout beyond the resistance line at the completion of the pattern, which should then see the resumption of the original uptrend.<\/li>\n
- A cup and handle is considered a bullish continuation pattern and is used to identify buying opportunities.<\/li>\n<\/ul>\n
However, the decline doesn’t happen as a straight dump but looks more like a “flag”, meaning buyers remain interested in the asset despite its high value. After breaking above the resistance, the price skyrockets to new highs pushed by the overall bullish sentiment. William O\u2019Neil found that stocks generally move about 20-25% in between bases. So, after a cup and handle pattern forms, traders may expect the stock to move higher by about 20-25%.<\/p>\n
Featured Video: The Double Bottom Pattern<\/h2>\n
We follow strict ethical journalism practices, which includes presenting unbiased information and citing reliable, attributed resources. There is no one perfect solution for everyone, so it’s important to find strategies that fit your personality and risk tolerance levels. The handle should not drop Cup and Handle Pattern<\/a> into the lower half of the cup, and ideally, it should stay in the upper third. An experience pro-trader should include these fundamental elements into the mix before going ahead with the analysis. 2009 is committed to honest, unbiased investing education to help you become an independent investor.<\/p>\n
As a well-defined pattern, the cup and handle pattern offers traders clear entry and exit points. Once you have identified the depth of the cup \u2014 preferably by ascertaining the shift in volume \u2014 you can identify price targets by tracking the multiple resistance levels. Also, the resistance line formed by the handle can indicate the breakout zone for the asset. One of the major benefits of using AI-driven technical analysis tools like TrendSpider is the ability to backtest historical data. This allows traders to compare the performance of their strategy over different periods and markets.<\/p>\n
Stock Trading<\/h2>\n
Inverted cup and handle patterns are also possible during downtrends and signal bearish continuations. In this case, the cup shape is inverted such that it represents a resurgence in price after a downtrend followed by a downward movement. The handle slopes upwards before breaking out sharply downward to continue the original bearish trend. When studying price charts for trading patterns, our online trading platform, Next Generation, comes with a vast range of drawing tools that you can use to display your data more clearly.<\/p>\n
- Stock Trading<\/a><\/li>\n