Cup and Handle Patterns

Cup and Handle on EURJPY

Cup and Handle on EURJPY

Cup and Handle on EURJPY. This is the second order that I placed in my verified trading results account, after I decided to continue to grow my account using swing trading. Let’s see how that worked.

The premise

If you take a look at the EURJPY chart, you’ll see a clearly defined cup and handle pattern. So, what should every trader do when he or she see a trading opportunity? There’s only one thing. Establish the risk, reward and place an order. So, I did exactly the same.

Cup and Handle on EURJPY

Is it or is it not a cup and handle pattern on EURJPY?

As we already saw in my previous post about Inverted Head and Shoulders on AUDCAD there is a chance that a pattern can either fail or morph into another pattern. Of course, there are also chances for a pattern to reach its target. And this is what every trader is looking for. But, as you may already know, seldom a pattern reach its target. Don’t worry and don’t panic. This is the reason why we need to use a proper risk management. So, we can survive into the market and moreover to be able to get some profits.

Cup and Handle on EURJPY

Order in place

Considering that I placed my order on December, 23rd 2019 and it was almost Christmas, I was a bit late at EURJPY party. I usually don’t like to chase the market. But, I thought that there was a valid breakout from the pattern and the price was retesting the breakout line. So, I decided to place my order just above the two small candles of the previous days. The price was compressed, so it should explode any time soon. And, it did. Even with an upside gap, which clearly was a sign of strength.

The outcome EURJPY part one

So, after you see this outcome you’re tempted to think that everything will be ok with your trade. But, there is a but. The wide candle that followed after the breakout candle, was not able to overcome the previous high and that might be a problem.

The moment of truth with cup and handle pattern on EURJPY

As I said earlier, that fact that the wide candle was not able to overcome the previous high it might be a problem. Of course, it’s not necessarily, but in such cases is desirable. Now, let’s take a look at what happened next.

The outcome EURJPY part two

Another bull trap! I bet you didn’t see that coming. Guess what? Me neither. But, this is the trading world and we need to get used to it.

The conclusion

The conclusion is, again, that to be successful in trading we need a very good risk management. That’s what we need in order to survive to this type of situations. Our beautiful cup and handle morphed into a very beautiful rising wedge.

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