eBacktesting - Learning: Cup & HandleeBacktesting - Learning: Cup & Handle
The Cup & Handle is a classic continuation pattern that often appears during strong trends. It shows a market that “cools off” (the cup), then does a smaller pullback (the handle), and may be ready for another push in the original direction.
This indicator helps you spot:
- Potential Cup & Handle formations as they develop
- When a handle forms (the final “pause” before continuation)
- The breakout moment, when price pushes above the rim level
It’s designed to support structured practice: you can replay charts and train your eyes to recognize the pattern, understand the context around it, and build consistent execution rules.
These indicators are built to pair perfectly with the eBacktesting extension, where traders can practice these concepts step-by-step. Backtesting concepts visually like this is one of the fastest ways to learn, build confidence, and improve trading performance.
Educational use only. Not financial advice.
Cuphandle
Cup & HandleHi, here is my take on 'Cup & Handle'
Pivot Points - ph (highest points in a certain period) are stored in an array
When there is a new ph , previous ph's are compared to the latest one.
A temporary test line is drawn between these 2 points.
The script checks if a close (between these 2 points) doesn't break above this test line.
(test line is deleted afterwards)
If it doesn't, and the '% max breaks' are not breached, 2 circle shaped lines are drawn
(Top & Bottom line of the cup) which forms the Cup, together with the Handle.
The red box (Handle) is the maximum 33-50% retracement (% of cup height)
-> Only the latest pattern is shown, enabling 'Show Cup labels' shows the position of cup patterns in history.
They can be visualised by using 'Bar Replay'
'% max breaks' -> 'maximum highs/lows breaking through the Top/Bottom line
(% of bars between left & right extreme points of the Cup)
Settings:
- 'Left', 'Right' -> regulates Pivot Point values
- 'PP back' -> max lookback for Pivot High
More explanation can be found in following print screens,
or by checking the tooltips in the settings
Cheers!
