TA 101: Ultimate Guide to The Cup and Handle Pattern

Cup and Handle (for less volatile assets):

• 30% bull run before reaching the first high.
  
• 10-30% drop to the bottom of the cup.
  
• 10-15% drop to the bottom of the handle.
  
• Length of the cup should cover more than 50-100 bars.
  
• Bottom of the cup should not be a V shape. (deal breaker!)
  
• More than 50% deep cup is a sign of weakness for the pattern.
  
• Handle cannot go lower than the bottom of the cup.
  
• The bottom of the handle should be at least 15-30% higher than the cup.
  

Volume profile:

• Volume should go up when price test the resistance the second time.
  
• Volume should go higher the third time price hits the resistance line.
  
• Volume should be lower while forming the cup.
  
• Red volume should not be too high or increasing.
  
• Volume profile is a deal breaker!
  

For more volatile assets could have exaggerated numbers.