Forex 1-2-3 Strategy – Price Action Strategy Explained With Examples

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Forex 1-2-3 Price Action Pattern

Forex 1-2-3 Strategy Introduction:

The forex 1-2-3 price action pattern trading is most simple yet powerful forex strategy you’ll ever find.

Question: When to use Forex 1-2-3 Price Action Pattern?

Answer: It works for any time.

The 1-2-3 pattern work best when the patterns follow the direction of trend (it also works against the trend). The pattern is also easy to identify on the chart and you can find it every day.

 

1-2-3 Price Action

We’re going to use MACD indicator as a combination to filter bad trades.

The basics of MACD:

 

MACD indicator

When the histogram flips up, then look for buy only.

MACD indicator

When the histogram flips down, then look for sell only.

 

The Forex 1-2-3 Strategy Method:

The 1-2-3 pattern in an uptrend

 

1-2-3 pattern on uptrend

  1. Existing trend

  2. Higher high

  3. Higher Low

***Break out of 2 (green line), results in strong continuation of price to up direction.

The 1-2-3 pattern on downtrend

 

1-2-3 pattern on downtrend

  1. Existing trend

  2. Lower Low

  3. Lower High

***Break out of 2(red line), results in strong continuation of price to down direction.

It’s not that complicated to learn this pattern. It takes a while to recognize and remember the pattern.

The setup divided into two parts:

  • Buy Setup

  • Sell Setup

The buy setup:

Make sure the MACD histogram is flipping up

price action with MACD histogramApply the 1-2-3 pattern.

 

123 price action with MACD histogram

  • Set a pending order just 1-3 pip above the 2

  • Stop loss on 3

More Examples for buy setup:

 

Examples for buy setup

Examples for buy setup

 

 

The Sell Setup:

  • Make sure the MACD histogram is flipping down.

MACD histogram price action sell setup

 

  • Apply the 1-2-3 pattern.

MACD histogram price action sell setup

  • Set a pending order just 1-3 pip below/on the 2

  • Stop loss on 3

More Examples

More Examples setup

More Examples setup

 

Profit Target discussion:

Count the pip range of A. Most of time, the Length of A=B. If the A=60 pip. B is also 60 pip.

 

pip range for price action

The Forex 1-2-3 Strategy Method In A Nutshell:

So, here is a basic outline of what you’ll be doing with this method:

  1. Use MACD to find a good trade

  1. Use forex 1-2-3 price action strategy as a trading trigger/signal.

I hope you enjoyed reading this short, simple, I wish you the best success.

Do share & comment below if you like this!

Best regards,
Tim Morris

Admin @ ForexMT4Indicators.com

 

PS: Next up! Inside Bar Pattern Price Action

It will show you 2 important steps before entering a trade!

 

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Recommended Price Action Courses

Advance Forex Candlestick Patterns

&

Advance Forex Price Action Trading

 

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