Cup and Handle (for less volatile assets):
Volume profile:
- 30% bull run before reaching the first high.
- 10-30% drop to the bottom of the cup.
- 10-15% drop to the bottom of the handle.
- Length of the cup should cover more than 50-100 bars.
- Bottom of the cup should not be a V shape. (deal breaker!)
- More than 50% deep cup is a sign of weakness for the pattern.
- Handle cannot go lower than the bottom of the cup.
- The bottom of the handle should be at least 15-30% higher than the cup.
Volume profile:
- Volume should go up when price test the resistance the second time.
- Volume should go higher the third time price hits the resistance line.
- Volume should be lower while forming the cup.
- Red volume should not be too high or increasing.
- Volume profile is a deal breaker!
