WHY Simple 1-2-3 Forex Trader?.
Learn The Powerful Forex Trading Strategy The Forex trading strategy is based on price action and normal Forex market structure that any trader should know. The 1 2 3 trading strategy is used as a continuation trading setup that is designed to take advantage of the trend of the market. strategy is a forex trading system based on the pattern, strategy is a forex trading system based on the pattern, Free Forex Strategies, Forex indicators, forex resources and free forex forecast. Forex Strategies Resources. Home Page; Blog 12# strategy Forex Trading System.
Another thing that needing a measured zone for price to pull back in to is it can help prevent you from entering a potentially over extended market. Over extension will often lead to mean reversion and entering a trade just prior to mean reversion can make for a painful trade. One of the easiest ways is to just trade the breakout of the pattern.
Another way to enter is to monitor price as it approaches swing 2. See if you can find some type of consolidation on your trading time frame or even a lower time frame. This will position you before the breakout and if the breakout succeeds with momentum, you will find yourself in quick profits. You can use somewhere below or above the 3 or use an ATR stop that measures the volatility of the market. Just ensure you are not placing your stop loss too close to market action.
The main drawback of the 1 2 3 pattern is that stops can be fairly large depending on the length of the leg. Traders may, once they recognize the pattern on a higher time frame, drop to a lower time frame and look for the same pattern on a smaller scale. You will get an earlier entry and a smaller risk profile as well. You should consider using the same stop location as you would on the higher time frame chart. With an earlier entry off the lower time frame 1 2 3 reversal, you will have an opportunity for a slightly larger position size.
You can use the same pattern to exit the trade as well. Once price takes out 1, you exit the trade regardless of the profits you have accumulated. Traders may notice this is a violation of higher highs and higher lows you need for an uptrend. You exit when you see price is no longer respecting the stair stepping trend direction pattern. There are many different ways to manage a trade from multiples of risk to price action patterns.
I like to keep things simple in regards to managing my trades with any trading strategy. As soon as a trend line breakout occurred. Just wait for the price to hit. Point 2 is a very strong signal. Set your own target example 20 pips. Use a trailing stop to exit max profit. Exit near strong resistance levels not. Share your opinion, can help everyone to understand the forex strategy.
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. But it is VERY simple when you look at the chart. This is the correction Point 3: If it does then all bets are off. Once you grasp the fundamental basics and practice you will see them all over the place.
The rules to this super easy system are simple. Identify a current trend 2. Identify 2 signals 3. Place your trade 4. 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.
This Figure summarizes the top and bottom trade. The long trade is an upward reversal following the pattern forming from a previous downtrend.
This can be confirmed by tracing the Fibonacci extension tool from point 1 to 2 and making a note of what level point 3 will lie on. But it is VERY simple when you look at the chart.