Cup and handle
A rounded recovery followed by a smaller consolidation near the prior high.
What to look for
- Rounded rather than V-shaped recovery
- Return near the prior rim
- Handle retraces a limited portion of the cup
Price falls, rounds out a base and climbs back to the earlier rim before making a shallower pullback. The final candle closes above the rim.
For the inverse version, look for a rounded top, a modest upward handle and a completed close below the rim.When the pattern is confirmed
A close above the rim with a predefined buffer.
Where the idea is wrong
Below handle structure or a deeper cup threshold.
The easy mistake
Long durations and subjective curvature make selection bias likely.
A complete cup and handle example
Show a rounded recovery toward a prior rim followed by a smaller consolidation near that rim. Define minimum duration, cup depth, curvature and maximum handle retracement before searching.
First rule to test
Rim close — enter no earlier than a complete close above the frozen rim by the chosen price buffer.
Alternative rule
Rim retest — after the confirmed break, wait for price to revisit the rim and close back above it before entering.
Place it where the pattern is wrong
Place the example stop one fixed ATR fraction below the lowest completed swing in the handle.
Context, trigger and risk
The pattern handles timing. The other tools decide whether the location makes sense and how far normal price movement can reach.
Defines the prior rim, rounded recovery and handle swings.
Normalises cup depth, handle size and the stop buffer.
Provides a separate longer-term trend context for continuation tests.
First exit to test
Cup-depth projection — project the rim-to-cup-low distance upward from the breakout.
Alternative exit
Trailing swing — exit after a completed swing low breaks during the post-breakout move.
Patterns need a method around them
Open a related strategy to see the wider market filter, entry, stop, exit and no-trade rule.
Weekly swing breakout
Tests slow breakouts above or below pre-existing weekly structure.
- ENTRY
- Enter at Monday 00:00 UTC after the qualifying Friday close, provided the opening gap is no greater than 0.50 × weekly ATR.
- STOP
- Stop 0.25 × weekly ATR beyond the breakout candle's opposite extreme. Risk 0.35% equity and round down to 0.01 lot.
- EXIT
- Exit at the Monday open following the first weekly close through the most recent confirmed opposite-side swing; initial stop remains active.
Donchian breakout
A rules-first breakout framework based on new lookback extremes.
- ENTRY
- Enter at the next H4 open after a completed close above the prior 20-bar upper channel for a long or below the lower channel for a short.
- STOP
- Initial stop is 2.0 × ATR(20) from the actual fill. Size to risk 0.50% of equity, rounded down to 0.01 lot; never add to or widen the position.
- EXIT
- Exit at the next H4 open after a completed close through the opposite 10-bar channel. The initial 2 ATR stop remains active until that exit.
Multi-timeframe continuation
Aligns a higher-timeframe state with a lower-timeframe trigger without peeking into unfinished bars.
- ENTRY
- Enter at the next M15 open after a candle closes back across EMA(20) in the H4 direction and beyond the prior M15 candle high/low.
- STOP
- Place stop 0.25 × M15 ATR(14) beyond the pullback extreme; risk 0.35% of equity and round down to 0.01 lot.
- EXIT
- Take profit at 2R. Exit early only when a completed M15 candle closes through the stop-side pullback extreme; close unresolved trades after 24 M15 bars.
Try it on older charts
Define the curve, depth and handle numerically before searching history.