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Cup and Handle Patterns with BigShort
Cup and Handle Patterns with BigShort

Turn cup and handle setups into profit using BigShort’s institutional insights

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Written by Brennan White
Updated over 3 weeks ago

BigShort empowers you to trade the cup and handle pattern with clarity. By clearly seeing the institutional activity via DarkPools, SmartFlow, and NOF, and seeing how retail traders are spending via Momo, you can ensure confident entries and exits leading to more profitably trading this pattern.
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What Is a Cup and Handle Pattern?

The cup and handle pattern is a bullish continuation formation. The “cup” resembles a rounded bottom, followed by a smaller “handle” before a breakout. This pattern indicates that smart money is accumulating, setting the stage to grow your account.

How to Identify the Setup

1. Recognize the Cup: Identify a rounded bottom formation that signals accumulation.

2. Spot the Handle: Look for a short consolidation that forms the handle

3. Note the Breakout: Note the price rising above thes highs in the cup and the handle.

How to Trade the Setup more profitably, with BigShort

  1. Entry Point: Enter when the price breaks above the handle’s resistance (#2, below)
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  2. Confirm the breakout: The breakout often doesn’t retest support before continuing, so how do you know it’s a real breakout? Let the institutional money tell you, via BigShort’s Net Options Flow and Smart Flow.
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    Before and during the early phase of the breakout, open the SF Segregated tab in Bigshort, and look for bullish NOF diamonds and SmartFlow to confirm that “smart” money is trading with you and supporting the move.
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    Bullish NOF diamonds (Blue points up, purple points down. Large in size):


    Bullish SmartFlow activity (Green candles, Green line inclined up):


    For Further confirmation, look for bullish Dark Pool buys below the price action or look for bullish Momo flow (“Retail” traders selling).
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    Bullish Dark Pools below the price (grey dots far below the price action. The larger and more numerous, the more bullish):


    Bullish Momo “shadow” bars (Grey bars pointing down, red line descending):

  3. Stop-Loss Placement: Place your stop-loss just below the handle to protect your position.
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  4. Profit Targeting with BigShort: Measure the cup’s depth to project your profit target. As you approach the target, if all signals still align, consider staying in until one or more signals change.
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Why BigShort?

Seeing what the “big money” institutions are doing in real time gives you more confidence in your entry and makes your exits more profitable. With DarkPools, Momo, SmartFlow, and NOF to give you real time signals, you can trust your decisions and capture consistent returns.
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​Disclaimer:
​The information provided in this article is for educational and informational purposes only and should not be considered as financial advice. BigShort does not provide personalized investment recommendations or advice, and you should not make any trading or investment decisions based solely on the content of this article. Trading in the stock market involves significant risk, including the potential loss of your entire investment. Past performance of our tools, indicators, or any referenced strategies does not guarantee future results. Always do your own research and consult with a qualified financial advisor before making investment decisions. Use of our platform and its features is at your own risk.

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