Cup & Handle (Zeiierman)

█ Overview
Cup & Handle (Zeiierman) is a classic continuation-pattern scanner that detects both bullish Cup+Handle and bearish Inverted Cup+Handle structures using a compact pivot stream. It’s designed to highlight rounded reversals back to a “rim” level, followed by a smaller pullback (“handle”) before a potential continuation move.

⚪ What It Detects
A Cup & Handle (Bull) forms when price makes a rounded decline from a left rim, bottoms, then climbs back to a similar right rim. After returning to the rim, price forms a handle (a smaller pullback) that stays within an allowed retracement range. This pattern often precedes a bullish continuation attempt.

An Inverted Cup & Handle (Bear) is the mirrored version. Price makes a rounded rise to a left rim, tops, then declines back to a similar right rim. After returning to that rim, price forms a handle (a smaller bounce) that stays within the allowed retracement range. This pattern often precedes a bearish continuation attempt.

█ How It Works

⚪ 1) Pivot Extraction (Swing Compression)
The script first converts raw candles into a small set of meaningful swing pivots using ta.pivothigh() and ta.pivotlow() with Pivot span. A pivot is accepted only after it is confirmed by the lookback window, which helps reduce noise.

Key effect:

• Higher Pivot span = fewer, stronger pivots (cleaner patterns)
  
• Lower Pivot span = more pivots (more patterns, more noise)
  

⚪ 2) Pattern Framing (4-Point Structure)
When at least four pivots exist, the script maps them into a fixed sequence:

For a bull Cup+Handle sequence: High → Low → High → Low

These are treated as:

• L = left rim pivot
  
• B = cup bottom pivot
  
• R = right rim pivot
  
• H = handle pivot
  

For a bear inverted Cup+Handle sequence: Low → High → Low → High

• Mapped similarly, but inverted.
  

This “4-pivot” structure is the minimum shape needed to define a cup and a handle without overfitting.

⚪ 3) Rim Similarity Filter (Cup Quality Control)
The script checks if the left rim and right rim are close enough to be considered a proper cup rim:

Rim similarity tolerance (%) controls this.

• Lower tolerance = only very clean symmetric rims
  
• Higher tolerance = allows uneven rims (more detections)
  

⚪ 4) Handle Depth Filter (Reject Weak or Messy Handles)
The handle is validated by measuring how deep it retraces relative to the cup depth:

Handle Retraction = |rim − handle| / |rim − bottom|

The handle must fall between:

• Handle retrace min
  
• Handle retrace max
  

This prevents:

• tiny “non-handle” wiggles (too shallow)
  
• deep pullbacks that break the structure (too deep)
  

█ How to Use

⚪ Interpreting a Bull Cup & Handle
Treat it like a continuation setup built around a key breakout level:

• Cup forms
  
• Handle forms
  
• Breakout happens above this level
  

Once price returns to this breakout zone and the handle stays controlled, the structure may attempt to continue upward.

Common behaviors after a clean signal:

1. Push above the breakout level
   
2. Brief retest/acceptance near the breakout zone
   
3. Continuation toward the projected target if momentum holds
   

⚪ Interpreting a Bear Inverted Cup & Handle
Treat it like a bearish continuation/rollover setup built around the same breakout concept:

• Cup forms (inverted)
  
• Handle forms
  
• Breakout happens below this level
  

Once price returns to this breakout zone and the handle stays controlled, the structure may attempt to continue downward.

Common behaviors after a clean signal:

1. Drop below the breakout level
   
2. Retest from underneath
   
3. Continuation toward the projected target if selling pressure persists
   

█ Settings

• Pivot span – pivot sensitivity. Higher = smoother pivots, fewer signals. Lower = more pivots, more signals/noise.
  
• Rim similarity tolerance (%) – rim quality filter. Lower = stricter symmetry, higher = more permissive detection.
  
• Handle retrace min – minimum handle depth (filters weak handles).
  
• Handle retrace max – maximum handle depth (filters messy/deep handles).
  
• Invalidation (handle max retrace %) – “maximum tolerated damage” for handle move before the structure is considered broken.
  
• Require breakout confirmation – only trigger when price closes beyond the rim in the expected direction.
  
• Target multiplier (× cup depth) – scales how far the projection target is. Lower = closer targets; 1.0 = classic depth target.
  

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Disclaimer

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