Category: Forex Trading

The stop-loss order can be placed around 2.7 to ensure that your risk and losses are protected if the markets turn against you. 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. TrendSpider’s AI-driven algorithms also help traders identify the most reliable entry and exit points for cup and handle patterns. Cup and handle formations are a reliable chart pattern that can offer high-probability trades for experienced stock traders.

This is a powerful chart pattern that’s used by stock traders to capture explosive breakout moves — where the stock price could increase 1000+% within a few years. The above content provided and paid for by Public and is for general informational purposes only. It is not intended to constitute investment advice or any other kind of professional advice and should not be relied upon as such. Before taking action based on any such information, we encourage you to consult with the appropriate professionals. We do not endorse any third parties referenced within the article. Market and economic views are subject to change without notice and may be untimely when presented here.

Inverse (or Bearish) Cup and Handle Pattern

Now, let’s see how you can effectively trade with the Cup and Handle trading strategy and how to make some profits. Then understand the psychology behind this profitable trading pattern. Be aware that the handle itself, which must stretch for a minimum five trading sessions, can morph into a base of its own in certain cases. That’s not a problem; it’s often a stock’s way of offering a buy point that’s clearer or lower than that suggested by the larger pattern. The stock needs to show a 30% uptrend from any price point, but it must be before the base’s construction. Or, the stock must show a minimum 20% increase from a prior breakout.

If the pattern forms in a downtrend then simply it is an indication of reversal and if you witness it in an uptrend, then it means it’s a sign to trade with the trend. As the name suggests, cup and handle chart patterns resemble a cup and a handle. The handle is a smaller cup formed after the completion of the cup and is generally followed by a breakout. The pattern may take anywhere between seven to sixty-five weeks to form.

Advantages of the Cup and Handle Pattern

Banking services and bank accounts are offered by Jiko Bank, a division of Mid-Central National Bank. JSI and Jiko Bank are not affiliated with Public Holdings, Inc. (“Public”) or any of its subsidiaries. None of these entities provide cup and handle pattern time frame legal, tax, or accounting advice. This publication does not intend to provide investment, tax or legal advice on either a general or specific basis. The views expressed in this article are those held by Dave Kranzler and not Kinesis.