123 Chart Pattern Forex Trading Strategy

The 123 Chart Pattern Forex Trading Strategy is a price action trading strategy based on the 123 chart pattern.

The 123 chart pattern can be used in both the uptrend and downtrend market.

Table Of Contents

The 123 Pattern

How does a 123 pattern form in a downtrend and uptrend market?

These two charts below show the difference between the 123 chart pattern in a downtrend and an uptrend.

This is 123 chart pattern in an uptrend:

This is 123 chart pattern in a downtrend:

How To Trade The 123 Chart Pattern

  1. once you’ve identified the 123 chart pattern, wait for a breakout candlestick. The breakout candlestick must breakout to the upside and close above point 2.
  2. place a buy stop pending order 1-2 pips above high of breakout candlestick
  3. place your stop loss 5-10 pips below the low of the breakout candlestick.
  4. for take profit,you can calculate it based on 1:3 risk to reward or use a previous swing high as your take profit target level.

Another way to Trade The 123 Chart Pattern

The trading rules given above are based on the breakout candlestick closing above/below point 2.

If you don’t want to wait for the breakout candlestick, then you can place your sell stop/buy stop pending order 2 pips below/above the point 2.

Advantages of the 123 Chart Pattern Forex Trading Strategy

Disadvantage of the 123 Chart Pattern Forex Trading Strategy

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