Cup and Handle Formation
Cup and Handle is one of the most profitable formations because the
price increase after breaking out is often very large. When creating a
formation, the shape of the course resembles a cup. Volume
behaves similarly to the rate (it also has the shape of a cup) but its
fluctuations are slightly ahead of the price movements (volume starts
to rise or fall slightly earlier than the price). If the price rises during the
shaping of the saucer, the volume must also grow strongly.
The
buy signal occurs after breaking above the level designating the upper boundary
of the formation - this level is determined by the left part of the cup developed at the highest volume at that time. The break from the cup must be confirmed
by a strong increase in the volume. Often, after breaking, there is
a correction movement down (marked yellow), after which the increase is
continued. In the charts of cryptocurrency with small capitalization and low share
prices, it is sometimes possible to create few cups in a row (one after the other,
each at a slightly higher level).
or multiple:
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