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Cup and Handle Patterns

Cup and Handle Pattern on USDCNH

Cup and Handle Pattern on USDCNH

Cup and Handle Pattern on USDCNH is a classical chart pattern, located at the end of a pullback. It is a bullish pattern as it appeared as a consolidation. Of course, I’m talking about an uptrend.

The premise

Let’s take a look at the USDCNH daily chart. We’ll see that there is a clear uptrend. And, there’s also a pullback. Therefore, at the end of the pullback we have a nice and clear cup and handle pattern.

cup-and-handle-pattern-on-usdcnh
Cup and Handle Pattern on USDCNH daily chart

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

As in any other classical chart pattern, I simply placed my buy stop order slightly above the resistance. I considered the resistance area the February 21st 2020 daily candle high. Consequently, my order is open on March 18th.

The outcome

One of the best confirmations for a pattern is that the breakout candle is a wide and healthy one. In this way, you know that what you saw was indeed a pattern. So, let’s take a look at what happened after the breakout.

the-outcome-of-the-cup-and-handle-pattern-on-usdcnh
The outcome of the cup and handle pattern on USDCNH daily chart

The conclusion

This is one of the two or three cases in which collecting the profits before the target was a good call. But, that doesn’t mean that if I would’ve let my trade run I would have had a loss. Though, it can mean that I would’ve had a different outcome. But, if you take a look at my analysis from head and shoulders, inverted head and shoulders, cup and handle and double bottom patterns you’ll see that I left into the market more than +10%. Therefore, closing my trades earlier is something which I decided to never repeat. Even if that means in one or two cases I will get a breakeven or even a loss instead of a win.

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