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Cup and Handle Patterns

Cup and Handle Pattern on NZDCHF

Cup and Handle Pattern on NZDCHF

Cup and Handle Pattern on NZDCHF is a classical chart pattern which is located at the end of a huge drop. Therefore, it might have bearish implications.

The premise

It seems that, this year, the cup and handle pattern is the chart of the year. With more than 14 daily classical chart patterns, so far. And, you can find them all in the Cup and Handle Patterns category from Capital Patterns. Therefore, this is the fifteenth cup and handle pattern from this year. So, let’s take a look at the daily chart of NZDCHF currency pair. We’ll see a clear and ordered downtrend, a pause from the downtrend represented by the symmetrical triangle and a drop at the end of which is located our cup and handle pattern.

cup-and-handle-pattern-on-nzdchf-detail
Cup and handle pattern on NZDCHF daily chart detail

How did I trade the cup and handle pattern on NZDCHF?

I simply placed a buy stop order slightly above the resistance of the pattern. And I considered resistance the April 14th 2020. Consequently, my order is open on April 29th 2020.

The outcome

Let’s see what happened after the breakout. So, let’s take a look again at the daily chart of NZDCHF. We can see that we have a nice and clear breakout candle. Which, of course, is a good thing. But, after the breakout candle, the next candle opened with a small gap. And it went down for a retest of the previous resistance which now, should act as a support. So far, the small gap and the retest will tell us that we don’t have such a strong breakout. This means that I don’t want to be patiently with this trade. Therefore, on May 1st, when the price opened with another gap into the downside, I decided to manually close the trade.

the-outcome-of-the-cup-and-handle-pattern-on-nzdchf
The outcome of the cup and handle pattern on NZDCHF daily chart detail

The conclusion

So, I managed to limit my loss for this trade to only -0,27% instead of a -0,60% which was my initial risk for this trade. If you take a look at what happened after I decided to close my trade you’ll see that the decision to manually close my trade proved to be a good one. And I think this is also the most important conclusion. That I managed to cut my loss. Another important thing is that even if everything posted on Capital Patterns is free, it doesn’t mean that it doesn’t require a lot of time and work from my side. Therefore, I would really appreciate if you could show your support and follow Capital Patterns on Twitter and Facebook. Or even subscribe to my newsletter. It would be really motivational and it would mean a lot to me. Thank you!

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