Educational Section š¢
š Cup and Handle Pattern: A Strong Signal in Technical Analysis š
The ā Cup and Handle model (Cup & Handle) š is one of the most prominent bullish patterns in technical analysis, indicating the continuation of an upward trend after a period of correction. This pattern is characterized by a gradual decline forming a cup followed by a slight rise creating the handle, before the price breaks through the resistance level to achieve the expected price targets šÆ.
Conversely, the š» Inverse Cup and Handle model (Inverse Cup & Handle) š appears as a bearish signal, suggesting the likelihood of continuing a downward trend after a period of volatility, making it an ideal opportunity for sellers to enter upon the break and set a stop-loss above the handle šØ.
ā
Trading Strategy:
š Entry: Upon breaking the resistance level (in the bullish model) or breaking the support (in the bearish model).
š Target: Equals the height of the cup in the bullish direction, or its decline in the bearish direction.
ā ļø Stop: Below the handle in the bullish model, and above it in the bearish model.
š¢ The success of this strategy relies on confirming the break with strong trading volume, which increases the reliability of the pattern and enhances the chances of success! šš„
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