Cup & Handle Chart Pattern — How to Spot and Trade It
7/6/2026
A rounded 'cup' base followed by a small downward 'handle', then breakout.
In plain words
A teacup: a smooth U, then a small dip on the right (the handle) before the pour upward.
What the classic books say
The Cup & Handle is a continuation pattern with reference reliability Medium and illustrative behaviour of ~60-68% on breakout (the kind of statistics catalogued in Bulkowski's encyclopedic pattern studies and Murphy's technical-analysis classic). A well-known bullish continuation, especially in trending markets.
Level by level
Beginner
Price slowly recovers in a U shape, takes a small breather, then breaks higher.
Intermediate
A rounded accumulation base and a shallow pullback set up a continuation breakout.
Advanced
Handle depth should be modest; breakout above the rim with volume validates it.
Trade plan (educational template)
- Entry: On a breakout above the handle/rim.
- Stop-loss: Below the handle low.
- Target: Cup depth projected up from the breakout.
- Check the numbers with the Risk-Reward calculator before any entry.
Common beginner mistakes
- Forcing a V-shape into a cup
- Accepting a too-deep handle
Practise it now
_Educational content only — not financial advice. Historical behaviour never guarantees future results._
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