12# 123 strategy Forex Trading System
submit by joy22
What is a 1-2-3 Pattern?
Good question. A 1-2-3 is simply best explained by looking at some charts.
It’s really simple when I throw up a few charts and take it from there. Here are
some recent stock charts.
Above is simply a daily bar chart of the stock of the big blue chip US stock General
Electric. Stock symbol GE.
Clearly marked is the 1-2-3 pattern that evolved in February. Simply put it is a 1-2-3
It’s a bottom, a correction, a retest that does not go beyond the original bottom, and
then a rebound beyond the correction. Phew…. That was a mouthful. But it is VERY
simple when you look at the chart.
Point 1: This is the bottom.
Point 2: This is the correction
Point 3: This is the retest the DOES NOT GO BEYOND point 1. If it does then all
bets are off. The pattern does not exist. Scratch it off and move on.
Once you have a valid 1-2-3 pattern then place your buy order in at the *breakout of
the number two point on the pattern.
Honestly, it is a VERY SIMPLE pattern that always give lots of opportunity and a
great risk/reward ratio. Once you grasp the fundamental basics and practice you will
see them all over the place.
The system will work on many Forex pairs and many major Stocks. The rules to this super easy
system are simple . 2 steps only! The only tricky part is bringing your knowledge of how to draw the lines onto your chart. Let me introduce to you to the 3 simple steps below. Then I.ll take you through some worked examples in order to illustrate just how easy this
This trading system involves 4 simple steps.
1. Identify a current trend
2. Identify 2 signals
3. Place your trade
4. Manage your trade later..
Identify a current trend.
Let.s take an example when a trend is down. (The opposite rules for the an up trend.)
2. Draw a trend line ( built-in tool in any trading platform). Trend line must be based on 3 points.
4. As soon as a trend line breakout occurred . identify the last .high. of your trend - strong
5. Now draw a horizontal line at that point (the last high) . point 2 on the picture below:
6. Now the horizontal line at point 2 level became your entry point. Just wait for the price to hit
point2 + 1 pip and instantly place a trade (entry). Point 2 is a very strong signal . we are getting a
double confirmed signal to enter a trade: Trend line breakout + 1st resistance level breakout.
Check history charts . this simple system is ultraprofitable.
Place your stop loss order 1 pip below a previous candle ( the one before your entry candle )
Take profit: Trends are the strongest level of the market . usually, when a trend reverses . you can
expect a significant move in the first minutes or hours. 20-100 pips will be yours almost every
trade. There are a few options of when to exit your trade:
a. Set your own target ( example 20 pips )
b. Use a trailing stop to exit ( max profit )
c. Exit near strong resistance levels (not
recommended for beginners).