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How To Trade the Cup With Handle Family of Trades

Most traders make a big mistake by wanting to be in some kind of trade all the time.  That is a sure way to go through your trading capital in short order.  By just sitting on the sidelines watching for a prime opportunity you will be in a position to use your money wisely with very little risk.  That is exactly what happened in August of last year (2013).  When WYNN showed up in our Cup with Handle scans we checked the fundamentals and found that it was everything a trader would want.  It ranked as the top stock in its Industry Group.  Its Industry Group also ranked among the leaders.  This was one of those moments that hit you right between the eyes.  These opportunities don’t come along very often but if you have the training and skill to recognize them when they do you will become a very successful trader.  It is not just enough to know that a Cup with Handle has formed.  You must do sufficient research to determine whether the company has been profitable and if it has a niche in some market that the public wants to participate in.  Notice I said “wants to” not “needs to”.  None of us “needs to” own an I-Phone or I-Pad but most of us have both.

Most traders have trouble determining when to get in the stock market.  Then after they are in they have no idea when they should get out.  Getting out at the right time cost traders the most money.  If they are lucky enough to get in a good stock that moves up right away, they think it is necessary to get out with a profit.  Thereby selling out only to see the stock keep going up.  If the stock market turns south while they are in this great stock they stay in the position and ride it down because they don’t want to take a loss.  These are psychological factors that all of us have to learn to overcome.  We must learn to ride the winners and get out of the losers.  When I started trading years ago I couldn’t figure out why someone couldn’t just tell me when to get in and get out.  That is why I developed the CupTrade Strategies©.  The Cup with Handle Pattern gives us an exact point to get in the trade.  After many years of trial and error we have come up with the best exits available.  We have proven that trade after trade.

We don’t tell you when or what to buy, that is a task you must learn to do on your own.  We provide you with the training; it is up to you to put forth the effort to become an accomplished trader.  The Chart for WYNN is a perfect example of waiting for the right stock and then having the knowledge to recognize it when it does.

The #CupTradeLE strategy enters the first trade when the price crosses above the Pivot Point Trendline which is an extension of the Closing Price of the bar that made up the Right Side of the Cup formation.  If the trade is taken out by one of our exits and the stock wants to go higher our Trend Trade strategy will re-enter.  The strategy can make up to 4 trades, one being the Cup with Handle trade and up to 3 Trend Trades.  At the time of this writing WYNN was in its 4th trade.  It has entered a correction and may be taken out in the next few days or it may only be taking a small breather before moving on up.  If it is taken out and then looks like it wants to go higher it can’t re-enter because it has already made its four trades.  In that case, if you want to keep trading it all you need to do is unload the #CupTradeLE strategy and load the #TrendTradeLE strategy which will keep making the Trend Trades.  To become a successful trader you must find a system you have confidence in and then learn everything you can about it.  The methods we use and have programmed our systems around dates back to Nicolas Darvas (1960) and is used by more successful traders then any other.