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Trading the Cup and Handle - Stock Chart Pattern

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Cup and Handle Pattern: -It is a continuation pattern. -Discovered in 1988 by William O'Neil. I recommend his book How to Make Money in Stocks. -You need a previous trend in order to have a continuation pattern. -When the pattern trickles down the "handle" the volume will be slowly declining. -Once it breaks the "handle," the volume needs to be very high. -Remember that the "cup" of the pattern needs to be a "U" shape and not a "V" shape. A "V" shape is likely to be a Double Bottom or a Double Top. -The "cup" is gradual, it is about a 1/3 retracement from the previous uptrend, and goes back down to re-calibrate itself. -You want to enter or add to your position when it breaks the "handle." ★ SUBSCRIBE TO MY YOUTUBE: ★ http://bit.ly/addtradersfly ★ ABOUT TRADERSFLY ★ TradersFly is a place where I enjoy sharing my knowledge and experience about the stock market, trading, and investing. Stock trading can be a brutal industry especially if you are new. Watch my free educational training videos to avoid making large mistakes and to just continue to get better. Stock trading and investing is a long journey - it doesn't happen overnight. If you are interested to share some insight or contribute to the community we'd love to have you subscribe and join us! STOCK TRADING COURSES: -- http://tradersfly.com/courses/ STOCK TRADING BOOKS: -- http://tradersfly.com/books/ WEBSITES: -- http://rise2learn.com -- http://criticalcharts.com -- http://investinghelpdesk.com -- http://tradersfly.com -- http://backstageincome.com -- http://sashaevdakov.com SOCIAL MEDIA: -- http://twitter.com/criticalcharts/ -- http://facebook.com/criticalcharts/ MY YOUTUBE CHANNELS: -- TradersFly: http://bit.ly/tradersfly -- BackstageIncome: http://bit.ly/backstageincome
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Text Comments (63)
RockTheCage55 (26 days ago)
The only think i didn't quite get is exactly where the volume needs to be high at. Is it at the bottom of the handle or is it when it breaks the trend line?
Mangeurdemouton (2 months ago)
i have a big question about patterns in general. Do you use pattern in a daily chart or on a monthly chart? because there is maybe a cup and handle patterns in a day but in the month there is another one but bigger. When i look at a stock chart, I look at 1 month chart 1 day chart and 1 week chart. So where should I draw the cup and handle to see potential profit in the future? Thank you!
MUSAB ZEE (3 months ago)
I HAVE A Q İs it normal if the right peak of the cup i mean the right peak of the u is it problem if the right peak of the u higher than the left peak?
Sudarshan Lade (5 months ago)
What will be the profit target in this pattern after we take buy position??
Sudarshan Lade (5 months ago)
Is there opposite to pattern of cup handle to make sell positions as we use cup handle for buy possisions?
D H (5 months ago)
Hi Sasha - Thanks for another helpful video. I've been encountering what I think are failed cup and handle patterns. The failure , from what I understand, is taking place when the price is increasing from the bottom/end of the handle, but then reversing before it can pass the cup's neckline...so no breakout. From what I've observed, the price plummets after this, slightly beyond the depth of the cup. Can you recommend any material that discusses failures and their warning signs?
D H (5 months ago)
The best thing I've found is Bulkowski's chart pattern encyclopedia and it's Cup and Handle "Focus on Failures" subsection. It only covers failures that happen after a small breakout, not failed handles and the aftermath. :)
thank you for this channel! keep it up!
Anton Shabunin (6 months ago)
Just a note - O'Neil did not discover the pattern, he just thoroughly researched and popularized it. First mention of CWH as far as I know dates back to 1963 William Jiler book on charts. I am sure the pattern was discovered long before that.
zain ginsburg (9 months ago)
Thank you for the well explained video
Book Insider (11 months ago)
Is RIOT currently in a cup and handle by just looking at 3 months?
Vaiju Mhalsekar (1 year ago)
Potho Chari (1 year ago)
Thnk u. Plz add real examples in the end of every video.
Emerrias (1 year ago)
Shoutout to Ethereum!
Chad711m (1 year ago)
Can this pattern work in a inverse situation like a inverse head and shoulders?
Chad711m (1 year ago)
Thanks for the video! It would be great if you could show some real situations with these explinations. Maybe some that are perfect and some that are not perfect that you would still trade on. New to the game and real charts help out a lot! Subbed to your channel. Keep up the good work!
Frantzy Nerelus (1 year ago)
Ramos Family (1 year ago)
Over a day, month year? What?
jose morelos (1 year ago)
Were would you buy in the cup and handle ?
Flavio Cesar (1 year ago)
Baba monthly
Sean Williams (1 year ago)
snapchat right now...
elimar008 (1 year ago)
is gold forming a cup and handle NOW??
Christian Mendoza (1 year ago)
If I've done my Homework right, SGYP is experiencing a cup right now, yes!??????? On the rise to it's uptrend
Nardotini (1 year ago)
Sasha, great video, when looking at the stock, at what time frame should I look at the stock? Like 3 months, 1 year, 1 month?
Vahagn Aldzhyan (2 years ago)
Could you look at the stock CLVS please. I have been watching it for a month now and I am pretty sure it is a cup and handle pattern. Can you check it out and let me know please?
Vahagn Aldzhyan (1 year ago)
Why wouldn't you say it's a cup and handle? It has been trading at a low volume during its lowest points. It seems that all of the patterns with CLVS match up with those seen in a cup and handle pattern.
Micah Chaney (2 years ago)
What if there's no prior uptrend, is it no longer a cup and handle pattern? AMRS 2016 (May - Oct). I'm thinking not, since you say the Cup and Handle pattern is a "continuation" pattern. So if it was major downtrending prior to this "cup" or bowl, what would you consider this pattern to be if anything, and how would you trade it? Also, do you think it looks like a "V" or would you agree it's a "U" shape? Thanks, great video.
allee m (2 years ago)
could you take a look at stock symbol scty. It looks to me like a cup and handle on a daily chart and also a trple bottom on a weekly chart.
Rene Amaton (2 years ago)
could it work in a 4h chart or in a 1hr chart?
Rene Amaton (2 years ago)
Thanks, do you think an inverse cup with handle will work as well I mean for shorting?
john palma (2 years ago)
nice overview, nice explanation,nice art work,you should have been an artist. Thanks!
SuperDagod1 (2 years ago)
So what do you think will happen with the silver price cup and handle?
SuperDagod1 (2 years ago)
Silver in general is on the handle of the cup and handle pattern. In fact the price is moving up the right side of the handle.
quantomic1106 (2 years ago)
Looks like IBB is forming this pattern right now.
eddie su (2 years ago)
i believe LC have a cup and handle pattern right now.
Carey Kirk (2 years ago)
ConditionRed (2 years ago)
Is this cup base off a day, month, 3month or 6 month ?
Cody Baumann (2 years ago)
When you talk about the volume are you referring to the volume available to buy or the volume that has already been purchased?
don k (2 years ago)
price of gold is a perfect example right now...over 1 year chart
mero40k (2 years ago)
Could we be in a cup and handle right now?
Marcus Hampton (3 years ago)
Forward motion make you sway like the ocean. Cup pattern is a powerful potion. What's the commotion, yo I'm not joking around.
Zander bam (3 years ago)
Bitcoin.. bitcoinwisdom, 6h.. whats your opinion?
Hollowrun (10 months ago)
if you would of invested a lot 2 years ago you would be rich right now
john palma (2 years ago)
What do u want 4 nothing?
willy wonka (3 years ago)
+Zander bam yes looks like cnh but it looks a bit strange.. wait until last local high is broken.. before going all in.. come to tradingview website for bitcoin traders chatting. :)
willy wonka (3 years ago)
+Sasha Evdakov he asks a simple question.... no need to answer him with more questions lol
Raybo sflorida (3 years ago)
u da man,,thx
EroticOnion23 (2 years ago)
+Sasha Evdakov (TradersFly) Hi, I've read O'Neal's book, worth it's weight in Benjamins.But, how do you tell the difference between a C&H vs a weak, non-undercutting double bottom?? The handle part of C&H looks like a weak 2nd part of the double bottom...Are double bottoms just more 'v' shaped? Thanks!
lokalonez11 (3 years ago)
Thank you again for the video. Great Cup and Handle pattern shown on PLKD today hence the  reason i'm here. Still learning on the fly and loving it every step. Thanks for people like you!
Kamal Lalchandani (3 years ago)
plz check sun pharma ,chartlink....it has formed cup and saucer pattern ....
jayzee (4 years ago)
I thought this was a rice bowl pattern??
jayzee (4 years ago)
+Sasha Evdakov you are right like i have a new name basically for english and people easy to understand i have been learning candles and meanings 8 hours a night for 6 weeks just meanings i have came up with meanings as in this like any other tade things change the names i have people can relate to which means a easy understanding and easier to remember by the way i made 257 on xauusd today but butt i cant lap it up i lost 54 pound also on xauusd
bipul bipul (4 years ago)
Good video for beginners like me ,but sir it could be more valuable if u tell us about 1. TIME PERIODS of this total formation and 2. about VOLUME ,not only handle and breakout level but during whole formation... One more question if any stock formed C & H formation during 2 years ... can i consider it a valid C & H formation??? thanks :) 
bipul bipul (4 years ago)
actually i read Thomas N. Bulkowski's description about that Cup formation have to 7 - 65 weeks  and its depth not more than 33% from the  prior uptrend %..n handle should have to form at least 1 - 2 week...thats y i asked that question...any way u r doing great job sir...ur videos r very helpful for us... wonderful presentation ...keep it up ...thanks
Aref Aldughaim (4 years ago)
thanks for sharing. what about the price target for this chart pattern?
Oan95 (4 years ago)
Hi thanks for the vid, quick question: What do you mean about the volume increase? Is that the volume of shares in your portfolio or do you mean the company's volume of shares issued is increasing?
Pak Janggot (4 years ago)
Thanks for sharing..
can this patter happen on a single day trade or over the long run?
+Sasha Evdakov thank you! very helpful
ToGetToTerrapin (4 years ago)
GTAT's breakout qualifies no? hehhehheh
Jack Smith (2 years ago)
+ToGetToTerrapin How did that GTAT trade work out for you ? :)
ToGetToTerrapin (4 years ago)
2 year basing pattern, yes...
Steven Stam (4 years ago)
very good explanation!!

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