ppatrading101

How to Trade Cup and Handle Pattern #BTC #TRUSTSWAP

Long
POLONIEX:SWAPUSD   Trustswap
A Cup and Handle Chart Pattern

It occurs when there is a price wave down, followed by a stabilizing period, followed by a rally of approximately equal size to the prior decline. It creates a U-shape, or the "cup" in our "cup and handle." The price then moves sideways or drifts downward within a channel—that forms the handle.

A cup and handle chart may signal either a reversal pattern or a continuation pattern. A reversal pattern occurs when the price is in a long-term downtrend, then forms a cup and handle that reverses the trend and the price starts rising.

Entering a Cup and Handle Trade
Wait for a handle to form. The handle often takes the form of a sideways or descending channel or a triangle. Buy when the price breaks above the top of the channel or triangle. When the price moves out of the handle, the pattern is considered complete, and the price is expected to rise.

While the price is expected to rise, that doesn't mean it will. The price could rise a little and then fall, it could move sideways, or it could fall right after entry. For this reason, a stop-loss is needed and the StopLoss suggested is below the handled.

TRUSTSWAP in this case is showing 2 Cup and Handle formation. From my many years of trading, a Cup and Handle at the top of a long trend usually means distribution and the pattern would not continue. As you can see, this is what happened on the first Cup and Handled formed on #SWAP.

Now we have a perfect opportunity for the pattern to succeed in reversing the downtrend and take the price up higher.

I have always liked to enter a small piece around the handle, then the rest at the breakout or retest of the breakout. The retest of the breakout is the highest risk to reward opportunity. StopLoss is below the handle and i like to take profits in 2 increments: since this is a measured move, i take profit at 50% of the measured moved and the rest at about 90% which you can see that they both align with resistance areas.

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