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Cup and Handle Patterns

Cup and Handle Pattern on EURNZD

Cup and Handle Pattern on EURNZD

Cup and Handle Pattern on EURNZD is a reversal classical chart pattern. But, let’s see what exactly means reversal in this particular case.

The premise

Let’s take a look at the daily chart of the EURNZD currency pair. We’ll see a nice uptrend. We’ll also see that now, the price is at the end of the pullback. A great place to see a reversal pattern. I know, that most of the traders think that a reversal appears only when a trend is changing. But, as we all know, most of the traders lose money when they trade. So, actually reversal is also when an uptrend take a break and a pullback is underway. It is also a reversal when the pullback is at the end and the main uptrend is ready to resume. The same is valid for a downtrend.

cup-and-handle-pattern-on-eurnzd-detail
Cup and handle pattern on EURNZD – detail – daily chart

How did I trade the cup and handle pattern on EURNZD

If you follow my blog for a while, I guess you already know that I only placed my buy stop order slightly above the February 3rd 2020. You also need to know that I never place an order before I know how much risk I’ll use and what is the target. Therefore, my order is open on February 25th 2020.

The outcome

This is the shortest trade that I’ve made since I moved back to daily timeframe. In fact, February 25th is a Friday. And, the next Monday, on February 28th, before the London open I decided to collect all the profits at 89% from the profit target. That’s because the London open is known for its huge volatility and there was no reason to risk 89% of my trade for a rest of 11%. Anyway, let’s take a look at the chart. There’s nothing more to add after you take a look at it.

the-outcome-of-the-cup-and-handle-pattern-on-eurnzd
The outcome of the cup and handle pattern on EURNZD daily chart

The conclusion of the cup and handle pattern on EURNZD

The most important thing to say here is that this kind of trades are the ones that make it worth to trade. It is a 1:4.5 risk reward trade which means that for a 0.5% risk the return will be 2.5%. In my case, I risked only 0.5% on it and I get back 2% because I closed my trade a bit earlier. I think it’s redundant already to repeat that I should’ve let the trade run instead of closing it. But, again, I’m a human also and I still need to improve my patience to let my trades run.

One last thing but very important one

The one last thing that I need to tell you is that this trade is the first winer from all the cup and handle patterns from this diary, so far. That means you always need to control your risk in order to survive until the moment when you’ll come back on profit after a drawdown. Don’t forget to check my verified trading results here.

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