Profit From This Rare And Powerful Chart Pattern| Influencer Forex Analysis•Jay Tun

Have you ever found or received something rare？ A typewriter or an old dollar note？ What were your emotions？ Delighted, honored, lucky, treasured？

Those emotions are elicited whenever I see this chart pattern. This chart pattern is rare and explosive in nature, often bringing in the money in a short period of time. What is this chart pattern？ Why is it explosive？

This is no other than the Cup and Handle chart pattern.

Cause

This chart pattern is caused by profit taking in a bull market, followed by renewed bullishness.

Heres a quick recap: Prices are in an uptrend in a bull market. On the other hand, prices are in a downtrend in a bear market.

Identifying The Cup And Handle Pattern

As the cup and handle pattern is caused by profit taking in a bull market, the prior trend must be up.

In other words, this is a continuation chart pattern. Therefore, this chart pattern is usually found in the middle of an uptrend.

The cup and handle pattern looks like 2 “rounding bottoms” stuck to each other. The 1st “rounding bottom” is larger (width and depth) while the 2nd is smaller.

What happens In the Cup And Handle？

Price has been climbing prior to this chart pattern. The traders who had bought early into the uptrend are sitting on profits. They decide to take their profits off the table (either partially or fully), resulting in a decline in prices.

Those who have missed out the initial uptrend spot the decline in prices and feel that it is a worthwhile opportunity to go Long now. Price starts climbing and it hits a resistance level at the top of the cup (shown in grey in the diagrams).

The price retreats as traders sell, forming a shallow bottom (left part of the handle). Buying increases and the right side of the handle is formed. Traders spot this chart pattern and continue buying, resulting in a breakout in price, keeping the uptrend intact.

Spot It Right

Things to look out for:

· Uptrend

· Volume drops as price decreases at the start of the cup

· Volume increases as price increases towards the end of the cup

· High volume on the breakout of the handle (as shown by the circle)

Show Me The Money

Lets see how this Cup and Handle chart pattern in EURUSD can be traded profitably.

#1 Breakout

· Watch for price to break the resistance zone (shown in grey)

· Enter your position at the breakout

· Set your stop loss

· Set a profit target

#2 Pullback

· Watch for price to break the resistance zone (shown in grey)

· Wait for the price to pull back to the area near the zone and enter your position the next session

· Set your stop loss

· Set a profit target

Sit back, sip some tea, and let it dash towards your profit target.

Conclusion

Volume is extremely important. A breakout with low volume is a negative signal.

Watch for this pattern and you will be rewarded handsomely.

「About The Author」

An independent trader who seeks to educate through his own trading

experiences, Jay began his own trading journey at the age of 22.

He is a self-taught trader who has read more than 200 books on

trading and investment since college and created his trading

methodologies modelling after several successful veteran traders.Jay has

since amassed 10 years of experience trading different market

conditions with consistency. Of the many disciplines in trading, he

specializes in trading options, swing trades on equities,

currencies,futures and contract-for-difference (CFDs).

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