WEBVTT 00:03.030 --> 00:08.720 In this video we're taking a look at the cup and handle training patter. 00:08.850 --> 00:15.300 Unlike many of the other chart patterns that we discuss in this module this does not have an inverse 00:16.250 --> 00:26.830 bunt a comp in a handle is pretty straight forward and supposed to represent a tea cup. 00:26.890 --> 00:35.000 Basically it's a rounded bottom which you've learned before and then it's gone a little bit of a pullback 00:35.060 --> 00:37.840 and then eventually a move higher. 00:37.890 --> 00:46.240 It is a reversal signal once a bullish reversal signal it doesn't happen that often necessarily but 00:46.450 --> 00:50.760 it is something that a lot of people will follow. 00:50.770 --> 00:59.170 There is a possible measuring stick with it but most people use it for a trend change period. 00:59.170 --> 01:01.800 They just they don't even necessarily try to measure it. 01:01.810 --> 01:07.930 They just take advantage of it and think about the psychology that's going on here. 01:07.950 --> 01:13.230 We are in a downtrend and things continue to go a little bit lower and people feel better about it. 01:13.240 --> 01:16.160 And then it is kind of quiet down. 01:16.180 --> 01:23.140 Some people will take profit eventually more people will take profit and then people will begin to be 01:23.140 --> 01:24.540 a little bit more concerned. 01:24.550 --> 01:28.650 We start to drift off and then eventually we pick up some momentum. 01:29.510 --> 01:32.950 And trading starts to pick up again. 01:32.960 --> 01:44.180 A lot of times with volume and it just confirmed a reversal pattern at the bottom of a larger move so 01:44.180 --> 01:51.460 on this chart I have a short term cup and handle pattern. 01:51.660 --> 01:55.860 You can see that there's the rounded bottom if you will. 01:55.860 --> 02:05.030 And then there's the handle the handle always pulls back slightly and then you get this massive amount 02:05.030 --> 02:12.320 of volume and then bitcoin just takes off so there's a couple different ways that you could have traded 02:12.320 --> 02:19.280 this potential move you could trying to measure the cup on and handle like this. 02:19.970 --> 02:26.350 So there's your handle and then there's your entire high from eight thousand nine thousand. 02:26.830 --> 02:33.740 And then on the breakout above the top of that resistance barrier you add a thousand because it is a 02:33.740 --> 02:39.890 thousand dollars thick if you will and your target would have been ten thousand you can see that we 02:39.890 --> 02:42.080 did in fact have a little bit of a reaction there. 02:42.080 --> 02:50.290 But why wouldn't you ten thousand dollars is a very large round number and then you just continue higher. 02:50.370 --> 02:51.800 You could have traded it that way. 02:51.800 --> 02:59.410 You could put your stop underneath the handle some traders would just simply hold because they believe 02:59.410 --> 03:08.180 that these patterns these cup and handle patterns are so monumental that they just assume that the trend 03:08.180 --> 03:13.700 continues and in this case that would have paid off all the way to eleven thousand seven hundred fifty 03:13.700 --> 03:16.390 before we got a significant pullback. 03:16.880 --> 03:22.070 You can see that there is a lot to be said for this pattern because it is complex it takes so much time 03:22.070 --> 03:23.360 to set up. 03:23.480 --> 03:26.150 Remember you've got all of that. 03:26.150 --> 03:29.200 It's not even really selling pressure. 03:29.360 --> 03:33.920 It is in the beginning but after that the market just seems to lose interest. 03:33.920 --> 03:37.430 And then there's another attempt to fall from there. 03:37.430 --> 03:39.580 And then it doesn't. 03:39.590 --> 03:49.120 So while the pattern is called the cup and handle you can almost make it something along the lines of 03:50.540 --> 03:54.220 a downtrend followed by general lack of interest. 03:54.280 --> 04:00.910 Another attempt to continue the downtrend followed by a complete lack of interest. 04:00.910 --> 04:07.150 So think about the psychology always you should always think about the psychology of what the participants 04:07.150 --> 04:09.320 are feeling on both sides. 04:09.340 --> 04:16.960 This high volume GREEN CANDLE that breaks out of resistance has the buyers feeling pretty good at the 04:16.960 --> 04:18.690 same time the sellers feel bad. 04:18.700 --> 04:26.110 They have to reverse their position and then we continue to rally cup and handle is a pattern that matters 04:26.110 --> 04:28.140 more on higher timeframes. 04:28.360 --> 04:32.470 But the cryptocurrency world is fairly new so you don't see this a lot. 04:32.470 --> 04:40.960 Say like on the daily and certainly not on the weekly chart however it has its roots in the stock market 04:40.960 --> 04:50.650 which of course a stock like IBM or you know some of the other stalwarts like Amazon Apple certainly 04:50.650 --> 04:57.560 conform these and these can take place over weeks if not months shorter timeframes of course happen 04:57.580 --> 05:04.930 like this example and they do mean the same thing in the cryptocurrency world that's pretty much where 05:04.930 --> 05:06.010 you're going to find these.