theTAguy

How to find a Cup and Handle Pattern?

Education
BINANCE:ETHUSDT   Ethereum / TetherUS
Hey everyone,
I have just earned some good profits on $ETH from the Cup and Handle Pattern. I gave a private signal for the same when the pattern formed completely, posting the link to it at the end of the article. So, I have decided to teach cup and handle pattern to you all. This pattern usually takes 1 month to 1 year to form on the higher, so you need to have patience while trading with this pattern. In my case, it took around 27 days to form the pattern.

(Please ignore the Fibonacci Fans mage in the chart, I don't want to delete my whole analysis on Ethereum )

The pattern of the cup and handle value on the collateral price chart is a technical indicator similar to the cup with the handle, where the cup is in the "U" position and the handle can be pulled slightly down. The cup and handle are considered a bullish signal, on the right side of the pattern usually meeting the lower trading volume .

As the stock that forms this pattern explores the highs of the past, it is likely to introduce trading pressure from investors who once bought at those levels; sales pressure may cause the price to be associated with a lower trend for a few days, before moving forward. The cup and handle are considered a continuous bullish pattern and are used to identify buy opportunities.

It is worth considering the following when receiving a cup and holding patterns:
Length: In general, long bottom cups with a "U" shape give a strong signal. Avoid sharp “V” bottom cups.
Depth: Ideally, the cup should not be too deep. Avoid very deep handles as well, as the handles should form in the upper part of the cup pattern.
Volume: Volume should decrease as prices fall and remain lower than the standard at the base of the vessel ; it should then grow as the stock begins to make its movements higher, turning it back to check its previous high.

The target gain is determined by measuring the distance between the bottom of the cup and the level of the outflow of the pattern and extending that distance to the top from the blast.

Cup and Handle Limitations
As with all technical indicators, the cup and handle should be used for concert and other signs and indications before making a trading decision. Especially with the cup and handle , some limitations have been identified by practitioners. The first is that it can take time for the pattern to form fully, which can lead to recent decisions. Although one month to a year is the normal time for a cup and a handle to form, it may also sooner or take several years to stabilize, making it uncertain in some cases. Another problem has to do with the depth of the cup portion. Sometimes a shallow cup can be a sign, and sometimes a deep cup may give a false mark. Sometimes a cup builds up without a handle. Finally, one limitation of all technical patterns is that you cannot trust it with the pump and dump coins and stocks (illiquid stocks).

How Do You Get a Cup and Hold a Pattern?
Consider a situation in which the stock has just reached a high point after a significant momentum, but it has stabilized, down by about 50%. At this point, the investor may buy stock, expecting it to return to previous levels. The stock then returns, testing the previous high resistance levels, after which it falls into a separate course. In the last leg of the pattern, the stock exceeds these resistance levels, rising 50% above the previous high.

Disclaimer

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