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21# 1-2-3-4 Reversal Forex Trading System

A 1-2-3-4 reversal chart pattern is build up of 4 definable points, known as point 1, 2 , 3 and 4. A typical 1-2-3-4 chart pattern is best traded after a strong currency pair up - or downtrend and can be defined by an easy set of trading rules. A trader can confirm the reversal trade using a technical indicator such as DMI or MACD. 

1-2-3-4 Basic Rules for Short Trades 

Point (1): The high in an up trending currency market.
Point (2): A downward correction in the up trend, the lowest bar in the correction before the price moves back up to point (3).
Point (3):  The high in the move up from Point (2) but a failure to make a new higher high(Point 1).
Point (4): Go short 1 pip below point (2)

 

A 1-2-3-4 reversal chart pattern is build up of 4 definable points, known as point 1, 2 , 3 and 4. A typical 1-2-3-4 chart pattern is best traded after a strong currency pair up - or downtrend and can be defined by an easy set of trading rules. A trader can confirm the reversal trade using a technical indicator such as DMI or MACD. 


1-2-3-4 Basic Rules for Short Trades 

Point (1): The high in an up trending currency market.
Point (2): A downward correction in the up trend, the lowest bar in the correction before the price moves back up to point (3).
Point (3):  The high in the move up from Point (2) but a failure to make a new higher high(Point 1).
Point (4): Go short 1 pip below point (2)

1-2-3-4 Up Forex Reversal Strategy using MACD


1) Trade this reversal pattern only after a strong downtrend
2) Place points (1),(2) and (3) on your chart 
3) Place a BUY order 1 pip above (2)
4) Confirm the trade using the MACD indicator (or another); the MACD must signal a buy or in buy mode already. 
5) Target level: Calculate the distance between (2) and (3); if for example the distance between (2) and (3) is 50 pips, than 50 pips is your target level. 
6) Place your stop 1 pip below (3) 

 

1) Trade this reversal pattern only after a strong up trend 
2) Place points (1),(2) and (3) on your chart 
3) Place a SELL order 1 pip below (2)
4) Confirm the trade using the DMI indicator (or another); DMI must signal a sell or in sell mode already. 
5) Target level: Calculate the distance between (2) and (3); if for example the distance between (2) and (3) is 250 pips, than 250 pips is your target level. 
6) Place your stop 1 pip above (3) 

 

 

1-2-3-4- Reversal trading

Comments: 6
  • #6

    Alexander (Wednesday, 06 May 2020 06:45)

    Guys, there is no indicator for this system. As a trader you have to determine those points 1234. Higher high for uptrend and Lower lows for downtrend. Those points 1234 on the chart and the lines were manually drawn. Meanwhile, ADX is a standard indicator in MT4. You will wait all your life, there will never be indicator for this system. When price breaks point 3, that is your point 4 and you take the trade. Maybe wait for a retrace and continuation. This is basic price action.

  • #5

    gnamke agnui (Monday, 09 March 2020 23:02)

    i will like you to send me the 1234 pattern indicator

  • #4

    Erik (Sunday, 17 November 2019 23:48)

    I already wait for 4 years and still no link...

  • #3

    Gillian (Sunday, 29 September 2019 22:52)

    There is no link for 1234 reversal indicator

  • #2

    RAMESH (Friday, 23 November 2018 15:05)

    HIDDEN INDICATOR?????

  • #1

    SANJAY SHARMA (Thursday, 13 February 2014 09:49)

    WHERE IS THE INDICATOR FOR DOWNLOAD HOPE ITS LINK IS MISSING