10 Day Trading Tips To Trade Cup And Handle Pattern

Day Trading Tips To Trade Cup And Handle Pattern. Day trader performing intraday trades in stocks forming cup and handle pattern.

(8) Short Stocks Or Bonds During Final Shakeout In Handle Formation

It is one of the most challenging intraday tips to perform trading activities in cup with handle chart pattern. A typical handle is always formed on the right hand side of the cup.

It begins when the stock or bond price reaches almost near to the highest peak of the left hand side of cup. However, some discrepancies between both the peaks of cup pattern are always likely to occur but these are permissible.

After reaching the peak on right hand side of cup, final shakeout in the stock or bond occurs. Short-term traders can quickly make short position during this phase to gain quick profits.

Your profit targets should be up to middle part of the cup’s height when measured from the peak. However, you should never forget to place stop loss order above the highest peak of the two sides.

[Read Also: 10 Surprising Things To Avoid In Cup And Handle Pattern]

(9) Buying Stocks For Day Trading After Bullish Breakout Near Ideal Buy Point

It is one of the most profitable day trading tips to trade cup and handle pattern. Bullish breakout after handle formation can provide excellent opportunity for day traders. It can help day traders to generate enough profits quickly.

However, one has to wait until the true breakout occurs. Once breakout happens, day traders rush to buy stocks or bonds near the ideal buy point.

According to a post published in Investors, the ideal buy point from a cup-with-handle base appears at the highest point of handle, plus 10 cents.

However, the ideal buying range is usually up to 5% above the ideal buy point. For example, if the peak in the handle of a stock is at $25 then add 10 cents to get the ideal buy point of $25.10. Now, the buying range would be from $25.10 to $26.35 i.e. 5% above the ideal buy point.

Thus, intraday or margin traders should buy as close as possible to the ideal buy point for maximum gains.

Image Source

  • Day trading tips to trade cup and handle pattern: Shutterstock

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