123 Reversal Pattern Strategy

[urbanforex]

Here I will post chart examples of this strategy and answer any questions that there may be. Please contribute to help make this strategy better.

- Navin

[Spongebob]

Hi Navin

I have been trading the 1-2-3 setups, i use the MACD as confirmation together with 5 and 10EMAs. I will post chart examples of my trades.

I hope we can perfect this simple yet very powerful strategy.

Cheers

Spongebob

[Spongebob]

Hi Navin

This is just one of my trades i did. I use the same distance from point 2 to point 3 as my profit limit.

For some people that dont already know money management, what I do is, I use 2% of my capital for every trade i trade, problem is how do you work it out?

Take your capital and multiply 2%, then divide that amount by number of pips your stop is. That tells you exactly what lot size to use.

Lets take chart as example, assuming $1000 account size.

2% is $20, stop was 40 pips, so lot size will be 50cent micro.

Hope that helps!

Cheers Lino

[urbanforex]

Originally Posted by Spongebob

Hi Navin

This is just one of my trades i did. I use the same distance from point 2 to point 3 as my profit limit.

For some people that dont already know money management, what I do is, I use 2% of my capital for every trade i trade, problem is how do you work it out?

Take your capital and multiply 2%, then divide that amount by number of pips your stop is. That tells you exactly what lot size to use.

Lets take chart as example, assuming $1000 account size.

2% is $20, stop was 40 pips, so lot size will be 50cent micro.

Hope that helps!

Cheers Lino

Hi Spongbob,

Very insightful and great trade. I think we can try and create a little excel file to calculate the money management aspect of it. I like your chart, very clear and easy to understand.

Cheers
- Navin

[Spongebob]

Hey

Here is something 123 fans might enjoy.

http://transcripts.fxstreet.com/2008/12/monthly-webinar-part-1-the-123-chart-pattern.html

Cheers Lino

[Pippo]

Hi everyone,

I´m testing this excellent "3 towers" strategy for the first time and i usually work with 1,5,15 and 30 min chart.
Can someone please tell me if i need to configure the "rainbow mma" indicator with diferent settings for each time frame?
In case i have to, how do i do it?


Excellent forum, by the way!
Thank you all for the contributes you are posting!

Pippo

[Spongebob]

Hi Pippo

I hope you had a look at the link i posted. Using 123 on 1 and 5min charts is VERY risky.

I would recommend 15min chart as your smallest time frame, thats just my opinion.

Look at the hourly for direction, then find your 123 on the smaller 15min chart. The RAINBOW MMAs dont need to be changed from time frame to time frame, its more the price action than indicators.

Hope that helps, cheers Lino

[urbanforex]

1-2-3 Pattern on the 15min chart on EURUSD on April 27th

[urbanforex]

Here is a 1-2-3 method on April 24th on the EURUSD 15min chart.