How to trade Inverse Cup and Handle pattern

Inverse Cup and Handle Chart Pattern Explained 

• The Cup and Handle pattern as well as the Inverted Cup and Handle pattern are both trend reversal chart patterns.

• In which Cup and Handle is a bullish trend reversal chart pattern.

• And Inverse Cup and Handle is a bearish trend reversal chart pattern.

• In this article, we will discuss about the inverse cup and handle pattern. 

• If you don't know how to trade the inverse cup and handle chart pattern, Then this article will help you lot.

• You can increase your knowledge about the technical analysis by reading this article.

INVERSE CUP AND HANDLE CHART PATTERN

• The inverse cup and handle is a bearish trend reversal chart pattern that formed at the top after the end of an uptrend. 

• This pattern is the inverse of the Cup and Handle pattern.

• The blue coloured horizontal line in the image is called the "neckline".

• After successfully breakout the cup and handle pattern, the trend is reversed to the downside.

• Therefore, this pattern is called the bearish trend reversal chart pattern.

• How is the inverse cup and handle pattern formed?

• Let's first divide the Inverse Cup and Handle pattern into four parts: 1, 2, 3, and 4.

Part : 1

• when the price goes up, it forms a HH-HL price action.

• bull in the market. 

• It means the buyers are stronger than the sellers.

Part : 2

• In the second part (top of cup), the price is consolidated within the range.

• It means there is indecision between the sellers and the buyers. 

• Finally, sellers take control from buyers and break the range (consolidation area) to the downside.

Part : 3

• After breaking the range, the price moves down and forms a LL-LH price action.

• bear in the market. 

• It means the sellers are stronger than the buyers. 

• Part 2 is the point, where the price action shifts from HH-HL to LL-LH.
  

Part : 4

• The handle is basically the retracement before the breakout. 

• How to trade the cup and handle pattern?

• The inverse cup and handle pattern is activated when the price action breaks below the neckline.

Entry :

• Take entry when price break down the neckline.

Stop Loss : 

• SL should be placed above the top of the handle.

Target : 

• Target should be equal to the distance between the neckline and top of cup.

SHORT QNAs  

1) What is inverse cup and handle pattern?

• The inverse cup and handle is a technical analysis chart pattern that indicates a change in trend. 

2) Is inverse cup and handle bearish pattern? 

• Yes, an inverse cup and handle is a bearish chart pattern. 

3) What is the opposite of inverse cup and handle pattern?

• The opposite of the inverse cup and handle is the cup and handle pattern, which formed at the bottom. 

4) Inverse Cup and handle pattern is a signal of _______.

• bearish trend reversal

5) What is the success rate of inverse cup and handle pattern?

• The success rate of the inverse cup and handle pattern is approx 70-80%.

6) What is inverse cup and handle target price? 

• The target price should be equal to the distance between the neckline and the top of the cup.

7) What is inverse cup and handle stop loss price? 

• The SL should be placed above the bottom of the handle. 

Thanks For Reading Article....... 📝

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