Cup & Handle
Definition
A rounded 'cup' base followed by a small downward 'handle', then breakout.
Psychology
Price slowly recovers in a U shape, takes a small breather, then breaks higher.
Real-life analogy
💡 A teacup: a smooth U, then a small dip on the right (the handle) before the pour upward.
Expected direction
up
Entry / Stop / Target
Entry: On a breakout above the handle/rim. · Stop: Below the handle low. · Target: Cup depth projected up from the breakout.
Historical behaviour
A well-known bullish continuation, especially in trending markets.
Illustrative success rate
~60-68% on breakout · Medium reliability
Common beginner mistakes
- • Forcing a V-shape into a cup
- • Accepting a too-deep handle
Quick quiz — did you understand?
1. Is the Cup & Handle generally considered bullish, bearish, or neutral?
2. After a confirmed Cup & Handle, the expected direction is usually:
3. Which is a common beginner mistake with the Cup & Handle?
Educational and probability-based analysis only. This is not financial advice and not a prediction of real market outcomes.