Cups, channels and busted patterns
Two slow shapes, one parallel one — and what a pattern records when it fails.
Read a cup and handle and a rounding bottom by their rims, bottom and handle in numbers, and say where the vague parts of those shapes need a stated rule. Draw a channel as a sequence with a regular rhythm without confusing its lines with the last higher low. Then read a busted pattern: name the close that completed it, the close that busted it, and explain why that failure is information rather than an embarrassment to redraw.
5 chapters · 6 quiz questions · 12 terms · included with a plan
Otus, on this module
Every pattern in this part has come with a line where the reading is wrong. This module ends on what happens when price actually gets there. Most people treat that as the pattern lying to them and go looking for a different name for the same bars. It is the opposite: a pattern that can be busted is the only kind that ever said anything.
The chapters
Each module ends with you doing what it taught — a written answer Otus reads, and a quiz.
- 01 · Read
Cups, handles and rounding bottoms
Slow shapes read by their rims, their bottom and their handle — in numbers.
- 02 · Read
The channel: a sequence with a rhythm
Two parallel lines, and why the line that ends the trend is still horizontal.
- 03 · Watch
Watch: The Busted Pattern
One minute, once it is public.
- 04 · Read
The busted pattern: failure is information
What it records when a completed pattern reverses — and why not to redraw it.
- 05 · Write
In your own words
Three closes and one sentence. Otus reads it.
- 06 · Quiz
Six questions
A wrong answer still pays. It costs the combo, not the XP.
12 terms this module defines
The same definitions Otus uses in the lessons. All of them are in the trading glossary.
- Cup and handle
- A slow, rounded decline and recovery to the same band, then a shallow pullback near the top, completed by a close above the rim. Read from its rims, bottom and handle in numbers.
- Rim
- The band both sides of a cup reach: a resistance level tested twice. The close above it is what completes the pattern.
- Handle
- The shallow pullback after the right rim, measured against the cup's depth. Deeper than a stated fraction — often a third — and it is a second decline, not a handle.
- Rounding bottom
- A gradual shift from falling to rising with no sharp low: the cup without a handle. The hardest pattern here to check, and best read as a change of pace in numbers.
- Channel
- A trend whose swings are regular enough that two parallel lines fit them. It describes the trend's rhythm; the trend itself still ends at the last higher low or lower high.
- Channel width
- The distance between a channel's two lines. A measurement of how far recent swings travelled, not a promise about the next one.
- Midline
- A line drawn halfway between a channel's edges. A drawing convention; nothing on the chart obliges price to react there or to reach the far edge.
- Failed completion
- A pattern that closed through its defining line and then closed back across it. A warning that the completion did not hold — not yet a bust.
- Busted pattern
- A completed pattern that then closed through the line named in advance as where its reading is wrong. A fact about the chart, recorded like any other close.
- Failure line
- The price, named before the completion, at which a pattern's reading stops being true — the right shoulder of a head and shoulders top, for example.
- Failure as information
- A pattern that can be busted is a claim that could be tested. When it is busted, the test has been run and the answer recorded — which is the point of naming the line.
- Redrawing after the fact
- Tilting lines, changing timeframe or renaming the pattern after a bust so the reading survives. It changes the question after the answer came in.
Finishing it pays 150 XP and 3 keys on the game board, on top of what each chapter earns. XP measures what you learned — never what you earned. How levels work.
Education only. Nothing here is a recommendation to buy or sell anything; the school teaches reading charts, never predictions.
Start with lesson one.
The first modules, Otus as your tutor and the game board are free. No card needed.