I have tried with many ways and then I found a very awsome system to trade 123 pattern effectively. Only with a 50 EMA and 2 common indicators, you can catch the trend axactly & at a very early point. I call it Triple timeframe system as exactly what it is.
This is something you should prepare to set up this system:
- Timeframe: Depending on what timeframe you desire to trade, you can choose any TF triple: (30M, H1, H4); or (H1, H4, D1); or (H4, D1, W1),... of which the midle TF is the one you would like to trade. Ex. H1 for the triple (M30, H1, H4) or H4 for the triple (H1, H4, D1) and D1 for (H4, D1, W1)...
- Basical knowledge of 123 pattern trade.
- 50 EMA on the lowest TF
- RSI on the lowest timframe
- Stochastic (5,3,3) on the highest TF
Trade:
A) SHORT when:
- Timeframe 1: Candle closed below 50 EMA AND RSI <= 50
- Timeframe 2 (We trade this TF): Candle closed and a 123 pattern has just appeared.
- Timeframe 3: Stochastic (5,3,3) pointing down
B) LONG when:
1. Timeframe 1: Candle closed above 50 EMA AND RSI >= 50
2. Timeframe 2 (We trade this TF): Candle closed and a 123 pattern has just appeared.
3. Timeframe 3: Stochastic (5,3,3) pointing up.
Default Stop loss: SL = Point 1 +/- spread +/- 1.
What is Point 1? Read again about 123 pattern trade please!
Devide your trade into 2 partial positions with the same amount. When the 1st position reach TP 50 or 100 pips (*), close it then move SL of the other to BE. Let the second position run and close it when price cross back 50 EMA on the lowest TF.
That’s all. I’m happy to share this with you. I hope you will try and give your opinion to develop the system.
Thanks.
(*). Depending on what triple TF and what pair you trade, you can set the a TP for your first partial position. In commen sense, the larger the TF, the bigger the TP.
Ex. For GBP/USD: 50 pips for (30M – H1 – H4); 100 pips for (H1 – H4 – D1); 150 pips for (H4- D1 – W1)...
Go to post 38 (page 3), post 47 (page 4) for system update