Form Structure

Left Side of the Cup: The price is in a downward trend, starting to form a downward arc. The characteristic of this stage is that the selling pressure gradually decreases, as the number of sellers willing to sell at lower prices diminishes with the continuous decline in price. Bottom: After the price drops to a certain extent, it begins to stabilize, forming the bottom of the cup. This bottom may be a relatively flat area or a small range of fluctuations, indicating that the market is seeking bottom support. Right Side: The price begins to rise slowly from the bottom, forming the right side of the cup. This rising process is usually gentle, accompanied by a certain buying force entering the market, but the overall trend is still not very clear. Handle: After the price rises to a certain extent, it experiences a slight pullback, forming the handle. The pullback of the handle is usually small, generally not exceeding one-third of the height of the cup. The shape of the handle can be a downward-sloping straight line or a small arc. 2. Characteristics of Trading Volume

In the cup part, during the downward process on the left side of the cup, the trading volume may be relatively large, reflecting the market's selling pressure. As the price approaches the bottom of the cup, trading volume gradually decreases, indicating that the selling pressure is weakening and the market is becoming calmer. In the rising process on the right side of the cup, trading volume begins to expand gently, showing that buying pressure is gradually entering the market, pushing prices up. Handle: When the price forms the handle pullback, trading volume usually decreases further, which is a key feature. If trading volume does not decrease significantly during the handle pullback, the reliability of the downward cup handle pattern will be questioned. When the price breaks through the resistance level of the handle, trading volume needs to expand significantly, which is an important signal to confirm the establishment of the downward cup handle pattern, indicating that the buying strength is strong enough to push the price further down.