Kupach Trading

Cup and Handle

BullishContinuationIntermediate

A slow, rounded base, a small dip, then a breakout.

Verdict: CautionBitcoin 4H: 18 trades, won 44%, avg trade +1.3% vs random day +2.3%. Backtest

Cup and Handle: textbook shape, step by step

After a rally, price hits a high and starts to cool off.

step 1/7

Trade rules

DirectionLong (buy)
EntryA candle CLOSE above the rim, with strong volume.
Cancelled ifThe handle drops below the middle of the cup.
TargetCup depth, projected from the breakout
3 common mistakes
  • V-shaped 'cups': a real cup is rounded and slow.
  • Handles that are too deep or too long.
  • Buying before the rim actually breaks.

Backtest

same rules every time · equal size · no fees · method
MarketTradesWonAvg tradeRandom day
Bitcoin · 4H · 2017-20261844%+1.30%+2.34%
US large caps (50) · 1D · 2016-202611552%+5.96%+4.79%

Verdict: CautionThe only one that beat a random entry, but only on stocks. On Bitcoin, it lost to random.

pattern +23%random +42%
Bitcoin 4H: pattern +23% vs random day +42% over 18 trades
pattern +685%random +550%
US large caps (50) 1D: pattern +685% vs random day +550% over 115 trades

Real examples

Bitcoin · 4H

Breakout Feb 6, 2021, exit Feb 8, 2021 (target)+17.71%
ResistanceThe cup32,172 · Jan 31, 2021Handle36,162 · Feb 4, 2021Breakout
Bitcoin 4H, real candles from Jan 29, 2021

Salesforce · 1D

Breakout Jan 26, 2023, exit May 9, 2023 (target)+23.09%
ResistanceThe cup126.34 · Dec 22, 2022Handle149.82 · Jan 25, 2023Breakout
Salesforce 1D, real candles from Nov 30, 2022

Bitcoin · 4H

trapBreakout Jul 30, 2022, exit Jul 31, 2022 (stop)−5.30%
ResistanceThe cup20,707 · Jul 26, 2022Handle23,414 · Jul 29, 2022Breakout
Bitcoin 4H, real candles from Jul 20, 2022