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PaperLesson: Inverted Cup & Handle
- Jan 16
- 1 min read
The Inverted Cup & Handle looks like a turned-over cup. Opposite of the Cup & Handle.
You’ll spot the rounded top first, then a small upward trend, that’s the handle. This is where you watch for the breakout.
Once the handle breaks, it’s a bearish signal and Shorts/Puts are in play, especially with rising volume and a strong bearish candle outside the handle's channel or trend line.
They're usually easy to spot and depending on your timeframe, can take time to form.
HOW TO TRADE IT:
Do not enter while the inverted cup is forming. The trade happens when the price breaks below the trend line of the handle. Look for a surge in volume as it breaks out. High volume indicate that sellers are jumping back in to drive the price down.
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