The cup and handle is a consolidation pattern. It signals a brief pause in the trend. This pattern is likely to appear when the market is in an indecisive phase as a rally pauses and consolidates.
The power of the zig zag indicator is in its ability to cut through market noise and locate chart turning points. These are where trends are turning from one direction to another.
A bullish engulfing candlestick can be a useful buy signal. But in order to trade them we have to be able to recognize reliable patterns from the false ones.
The first step in trend trading is spotting key support and resistances. This post looks at trend trading with support, resistance and confluence lines.