ABC and 123 Forex Chart Patterns Strategy

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ABC and 123 Forex Chart Patterns Strategy

The 123 pattern is a reversal chart pattern which occurs very frequently and has a very high success ratio.
This pattern can be found at the end of trends and swings. This can also indicate a change of trend. You can also found this pattern in a trading range.
They take place when the directional momentum of a trend is diminishing.

Forex Indicators:

  • The Turthe Channel Trading;
  • Show 123 V.2 indicatorS fetures:
  • Up color = green
  • down color= Red
  • Failed up color= lime
  • Failed down color= orange
  • Fib piv 2 (only for time frame h1);

Trade only in direction of the Turtle Trend Channel

  1. Buy on the break of the point 2
  2. Sell on the break of the point 2

Time Frame 1 hour, Exit on the fibo pivot 2

Working of the pattern:

  • An indication of the change in trend is seen, when price retraces the original down move.
  • Failure to make a new low.
  • Price rallying again from here, creating an anticipation of a reversal.
  • Breach of the previous high, confirming the reversal.

Trading rules:

Entry:

  • It would be best to enter a trade during the break of point 2 – the previous high (or low as the case maybe).

Stop:

  • Place stop loss at the low of point 1. Those who are aggressive put their stops at point 3. Give the price a room to move without hitting the stops.

Price targets:

  • To take profit, you must use a measure move concept because this pattern don’t have any specific target. To do this, you must calculate the distance from point 1 to point 2 in the formation.
    Add this to the low of point 3, and this should be the minimum distance that price will travel to.

Some practical points:

The setup of the entire pattern from point 1 to 3 could take place in 3 bars or as long as 20 bars. But the rules of pattern remain the same.

A point to keep in mind here is that the more the number of bars involved in the setup, bigger should be the move. This is not a fixed rule, but more often not, this concept is followed by the price.

Allow the pattern to prove itself before entering a trade. If point 3 forms below point 1, the pattern is negated.

Similarly price has to break the high of point 2 for confirmation.

There will be times when price will consolidate within the area of points 2 & 3, without giving any indications of the direction. At such times it is better to stay out, till price action confirms a direction.
Target zone.
Target Zones:

  • The measured move concept.
  • Fibonacci Expansions.

Fibonacci ratios

Fibonacci ratios are a very popular tool among technical traders and are based on a particular series of numbers identified by mathematician Leonardo Fibonacci in the thirteenth century.

The Fibonacci sequence of numbers is as follows:

0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, etc.


Forex Trading Strategies Installation Instructions

ABC and 123 Forex Chart Patterns Strategy is a combination of Metatrader 4 (MT4) indicator(s) and template.

The essence of this forex strategy is to transform the accumulated history data and trading signals.

ABC and 123 Forex Chart Patterns Strategy provides an opportunity to detect various peculiarities and patterns in price dynamics which are invisible to the naked eye.

Based on this information, traders can assume further price movement and adjust this strategy accordingly.

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How to install ABC and 123 Forex Chart Patterns Strategy?

  • Download ABC and 123 Forex Chart Patterns Strategy.zip
  • *Copy mq4 and ex4 files to your Metatrader Directory / experts / indicators /
  • Copy tpl file (Template) to your Metatrader Directory / templates /
  • Start or restart your Metatrader Client
  • Select Chart and Timeframe where you want to test your forex strategy
  • Right click on your trading chart and hover onTemplate
  • Move right to select ABC and 123 Forex Chart Patterns Strategy
  • You will see ABC and 123 Forex Chart Patterns Strategy is available on your Chart

*Note: Not all forex strategies come with mq4/ex4 files. Some templates are already integrated with the MT4 Indicators from the MetaTrader Platform.

Click here below to download:

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