Chart pattern
Cup and Handle explained
A cup and handle is a bullish continuation pattern. A rounded recovery (the cup) rises back to the prior high, then a small pullback (the handle) forms before a possible breakout.
How to spot it
- Find a rounded, U-shaped decline and recovery back to the previous high.
- Mark the rim: the high on both sides of the cup.
- Look for a shallow pullback after the right rim, which forms the handle.
- Watch for a close above the rim, ideally with rising volume.
What invalidates it
The pattern is invalidated if the handle falls below roughly the cup's midpoint or if the breakout fails and price returns into the cup.
Common mistakes
- Using a sharp V-shaped dip instead of a rounded cup
- Letting the handle become deep or too long
- Entering before the rim breaks
- Ignoring a weak broader trend
Questions
- How long does a cup and handle take?
- It can span weeks or months on daily charts, and shorter on intraday ones. The proportions matter more than the exact time.
- How deep should the handle be?
- Usually a modest pullback relative to the cup. A very deep handle weakens the pattern.
- Does it work in forex and crypto?
- It appears in any market with a chart, but it is a subjective pattern that depends on how you draw it.
Related patterns
See how patterns are applied to a specific instrument in the market guides.
Educational content, not financial advice. Chart patterns describe what price has done and do not predict what it will do next.
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