Balance of Handel Forex: Account Balance, Handles & Chart Patterns Guide

Are you trying to understand 'Balance of Handel' in the forex market and finding nothing clear？ This is a common problem many traders face. The term isn't actually a single official concept in trading.

　　Instead, it's likely a mix of three different forex concepts that have been combined together. These concepts are important for any trader to know.

　　We will break down what you're probably looking for: Account Balance, the price "Handle," and the "Cup and Handle" chart pattern. By the end of this article, you'll understand how these work together in real trading.

The Forex Rosetta Stone

　　The phrase "Balance of Handel forex" doesn't exist as a single concept. We need to solve this puzzle by looking at its three most likely parts. Each piece has its own meaning in forex trading.

Concept 1: Account Balance

　　Your account balance is the total money in your trading account. It shows all your deposits, withdrawals, and the results of your closed trades. This is your basic capital before counting any open trades.

Concept 2: The Price "Handle"

　　The "Handle" is trader slang. It usually means a big 100-pip price move, especially around round numbers. For example, if EUR/USD moves from 1.0800 to 1.0900, traders call this a one-handle move. It's a quick way to talk about major price changes.

Concept 3: "Cup and Handle"

　　The "Cup and Handle" is a popular chart pattern used in technical analysis. It signals that an uptrend will likely continue. On a price chart, it looks like a teacup and can give strong buy signals to traders.

　　To make things clear, here's a simple breakdown:

Balance vs. Equity

　　To master your account, you must know the difference between balance and equity. These two numbers are the most important on your trading platform. Many new traders mix them up, which can be costly.

Your Settled Capital

　　Your account balance is like your bank statement at the end of the day. It only changes when you deposit or withdraw money, or when you close a trade.

　　When you close a winning trade, the profit adds to your balance. When you close a losing trade, the loss comes out of your balance. While a trade is open, your balance stays the same.

Your Real-Time Value

　　Equity shows the current value of your account. It's the most important number to watch when you have active trades. The formula is simple: Equity = Balance + Floating (Unrealized) Profits/Losses.

　　If your open trades are winning, your equity will be higher than your balance. If they're losing, your equity will be lower. This number changes with every price movement in the market. Think of equity as what your account is worth right now.

Why This Distinction Matters

　　Here's the key point: brokers use your equity, not your balance, to check if you have enough margin. Margin is the money needed to keep your trades open.

　　You might have a balance of $10,000, but if you have open trades losing $3,000, your equity is only $7,000. Your broker will base your margin requirements on that $7,000 figure. If your equity drops too low, you might get a margin call, where the broker closes your positions to stop further losses.

　　Let's show this with a simple example:

• Initial Deposit: $5,000 -> Balance: $5,000, Equity: $5,000
• Open a trade, it's now +$250: -> Balance: $5,000, Equity: $5,250
• The trade reverses to -$100: -> Balance: $5,000, Equity: $4,900
• You close the trade for $150 profit: -> Balance: $5,150, Equity: $5,150

　　Understanding this relationship protects you from one of the biggest risks in forex trading.

Mastering the Pattern

　　Of the three concepts, the Cup and Handle gives you the most useful trading signals. It's a powerful pattern, but only if you can spot it correctly. First, you need to learn its parts.

Anatomy of the Pattern

　　This pattern has four main parts that must be present to be valid.

　　First, there must be an uptrend before the pattern. The Cup and Handle continues an existing trend, so without a prior uptrend, the pattern doesn't mean much.

　　Second is the 'Cup'. This looks like a bowl or a rounded bottom on the chart. A "U" shape is best, as it shows a period where price stabilizes. A sharp "V" shape is less reliable because it shows too much price jumping around.

　　Third is the 'Handle'. After the cup forms, the price usually moves slightly down or sideways in a narrow range. This is the handle. It's the final brief period of consolidation before a potential breakout.

　　Fourth is the breakout. The buy signal happens when the price moves strongly above the resistance level at the top of the handle. This breakout should happen with increased trading volume.

Rules for Identification

　　Not every curve on a chart is a valid Cup and Handle. We use these rules to find the best setups.

　　Rule 1: Cup Depth. The cup shouldn't be too deep. The bottom of the cup should not go down more than 50% from the previous high. A deeper drop might mean the trend is reversing, not continuing.

　　Rule 2: Handle Formation. The handle should form in the upper half of the cup. It should also be relatively shallow, typically not more than one-third of the cup's height.

　　Rule 3: Volume Confirmation. Volume helps confirm the pattern. Volume should generally decrease as the cup and handle form, showing less selling pressure. Then, when price breaks above the handle's resistance, we should see a big increase in volume. This confirms buyers are committed.

　　From years of trading this pattern, we've found it works better on daily and weekly charts. A daily candle represents more trading volume than an hourly one, and in forex, volume means conviction.

A Practical Case Study

　　Now, let's connect all three concepts. Let's walk through a sample trade from start to finish.

Step 1: The Pre-Trade Check

　　Before analyzing anything, we check our account. Let's say our balance is $10,000. Good risk management is essential. Our rule is to never risk more than 1% of our balance on one trade. For this account, our maximum risk is $100.

Step 2: Spotting the Opportunity

　　While looking at charts, we notice a Cup and Handle pattern forming on the GBP/JPY daily chart. The pair has been in a strong uptrend, and the pattern looks well-formed. This could be a good long trade setup.

Step 3: Defining the Plan

　　A good trade needs a clear plan. We'll place a buy order just above the handle's resistance line, at 191.50. This ensures we only enter if the breakout happens.

　　Our stop-loss goes below the low of the handle, at 190.50. This gives us a risk of 100 pips. In trader talk, we're risking one full "handle" on this trade. Based on our position size, this 100-pip risk equals our maximum loss of $100.

　　Our profit target is based on the depth of the cup. By measuring from the bottom of the cup to the breakout level and projecting that distance upward, we set our target at 194.50, a 300-pip reward. This gives us a good 1:3 risk-to-reward ratio.

Step 4: The Trade is Live

　　Our buy order at 191.50 gets filled. The trade is now active.

　　At this point, our account balance stays at $10,000 because the position is still open. However, our equity starts to change right away. If the price moves up to 192.00, our equity will increase to about $10,033 (depending on our position size). If price drops, our equity will fall below $10,000.

Step 5: Banking the Profit

　　Our analysis proves correct. Over the next few days, the price rises and hits our profit target at 194.50. The position closes automatically for a $300 profit.

　　Now, that profit is added to our account. Both our equity and balance settle at a new higher figure of $10,300.

　　In this single trade, we used our balance to define risk, identified a Cup and Handle pattern for our entry, and measured our stop-loss in terms of a price "handle."

Achieving True Balance

　　You came here searching for "Balance of Handel forex," a term that causes confusion. Now you have clarity. You understand the important difference between account balance and equity, which is key to managing risk.

　　You know that a "handle" is trader slang for a major price move, and you have a complete guide to finding and trading the "Cup and Handle" pattern.

　　The ultimate goal in trading is to find a sustainable balance in your strategy. This means balancing risk and reward, technical analysis and disciplined execution, and ambition and patience.

　　By mastering these basic concepts, you've moved beyond confusing jargon. You're one step closer to achieving a healthy, balanced approach to your forex trading journey.