Easy Cup and Handle Chart Pattern For Profitable Trading
The Cup and Handle Chart pattern is formed normally in the up trend. We should also expect for the consildation in cup area before the proper breakout.
This chart pattern can be seen in the shapes like a head and shoulder, rectangle, or a flag. It looks like a Cup and Handle in shape.
The Cup and Handle is formed by two main components:
1- Handle
2_ Cup
Formation Of Cup
As a learner to find the cup then it looks exactly like a bowl and we can expect this cup after the downward trend. Its bottom looks like a round bottom. One more thing when cup formation is completed then we can see a consolidation in the market. The market will trade on the right-hand side giving birth to the handle.
When there comes a breakout from the handle trading range then it’s a sign of an upward trend.
How a Trader Can Trade Cup and Candle Chart Pattern for Profitable Trading?
Cup and Handle Chart Pattern are normally the same height on both sides of the cup but we cannot find any 100% accurate pattern like this. After the high is formed then the next step is to expect a pullback right from the handle area. We call the consolidation area as Handle.
Important Tips For This Pattern:
We should look for the handle which must be smaller than cup in terms of size. The handle should not formed below the half way of the cup. This type of formation should be done in the upper level of the cup.
If you succeed in finding this pattern then wait for the proper breakout and expect a new higher high in that case. A trader can plan its trade from the area of breakout.
Consider Volume:
As we all know these days volume trading is very useful. So, traders must check the volume analysis at the time of breakout to confirm a trade. You can choose any volume indicator from trading view.