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This basically is a slow downward move followed by sideways move then upwards. This takes the shape of a cup(without the handle).

This pattern can take some time to develop.  Once it's got the shape of a nice cup then draw a line though the peaks of the cup and once the price breaks above the peaks of the cup you will get your buy signal.

You can measure the distance of the target, measure from the top of the cup to the bottom then you project that line from the breakout point, you then have your target.

Please click on chart below for larger image

 

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Been trading the markets for more than 20 years and learnt the hard way to trade.

Comments

  • diver993
    diver993 Thursday, 18 October 2012

    Mmmm.. kinda reminds me of my first wife's backside, except the downward movement was far from slow, in fact rapid would be a far more accurate description. "Once it's got the shape of a nice cup....." Nah, more like the size and shape of the bottom of a barge and moved with as much grace and speed too. "You can measure the distance of the target," ..... I gotta stop right there.. LOL!
    Please nobody take offence .... even the chart drawing makes me laugh :):) I promise I'll never look at a rounded bottom in quite the same way again...lol!

  • Tradesmarter
    Tradesmarter Friday, 19 October 2012

    Well then Tim, I'd better not ask for your views on double tops or cup sizes then!...charting imvho should always be serious and fun at the same time!...so a great answer as far as I was concerned

  • ronnie
    ronnie Friday, 19 October 2012

    Made me smile on such a miserable and wet Friday!

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