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How to use the 123 strategy effectively

  • #141
  • Dec 6, 2010 5:56am Dec 6, 2010 5:56am
...price was rising up to 7am (GMT), so waited for a short 123 setup to emerge. Using Paulus' def the first 123 formed for a short entry @3286/7...this has yet to reach a 1:1 target, but has already reached the 161.8 fib extension....my concern with this setup was that price had already printed a 123 (standard definition), therefore this was a continuation entry, which Paulus doesn't trade.

edit:...ah, Paulus is using Fib Expansions rather than extensions.
Attached Image
  • #142
  • Dec 6, 2010 5:59am Dec 6, 2010 5:59am
my 1st 5min trade..trying new tgt of 161.8 of the move from 1 - 2 for better RR

1hour UC and 1hour EU also open

P
Attached Image(s) (click to enlarge)
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  • #143
  • Dec 6, 2010 6:03am Dec 6, 2010 6:03am
Quoting Paulus
my 1st 5min trade..trying new tgt of 161.8 of the move from 1 - 2 for better RR

1hour UC and 1hour EU also open

P
Hi P, you decided to relax the 5min criteria on number of candles between 2 & 3 on that one?...(only 1 rather than >1)
  • #144
  • Dec 6, 2010 6:28am Dec 6, 2010 6:28am
sorry marked it up wrong

P

rule still stands
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  • #145
  • Dec 6, 2010 6:29am Dec 6, 2010 6:29am
Quoting Paulus
sorry marked it up wrong

P

rule still stands
....nice jink up so far..
  • #146
  • Dec 6, 2010 6:46am Dec 6, 2010 6:46am
Quoting Paulus
sorry marked it up wrong

P

rule still stands
...still only 1 candle between 2 & 3??
  • #147
  • Dec 6, 2010 7:51am Dec 6, 2010 7:51am
yes your right i was too quick i took that trade on a spread betting account..but the count is only 1 between 2 and 3 and so does not qaulify as a pull back sorry chaps

P
  • #148
  • Dec 6, 2010 7:54am Dec 6, 2010 7:54am
Quoting Paulus
yes your right i was too quick i took that trade on a spread betting account..but the count is only 1 between 2 and 3 and so does not qaulify as a pull back sorry chaps

P
Not far off ADR now and perhaps the US will give it a kick north from a Paulus long 123
  • #149
  • Dec 6, 2010 8:39am Dec 6, 2010 8:39am
now we have it

P
Attached Image (click to enlarge)
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  • #150
  • Dec 6, 2010 8:43am Dec 6, 2010 8:43am
Quoting Paulus
now we have it

P
looks a 'good shape', too. I'm long from 3291 and will take the 138.2 ext if offered, as analysis on my other 5min chart is suggesting another leg down...
  • #151
  • Dec 6, 2010 9:51am Dec 6, 2010 9:51am
well from experience its either going to go up..sidways..or down...lols

p
  • #152
  • Dec 6, 2010 12:13pm Dec 6, 2010 12:13pm
Quoting Paulus
well from experience its either going to go up..sidways..or down...lols

p
Great patience if you're still holding the long, 161.8 FE (3319) not far off now
  • #153
  • Dec 6, 2010 12:42pm Dec 6, 2010 12:42pm
yes Im holding Im black and white with trading and unemotional very very rarely close early

But my god its taking its time !

P
  • #154
  • Edited 4:34am Dec 7, 2010 4:02am | Edited 4:34am
...as price was heading down into 7am (GMT) the hunt for 123 long was on. I have this one as the first qualifier (as per Paulus' def), which is in long now from 3375. The 161.8 fib extension ties in with a Resistance Pivot, so if it gets there i'll take profit.

Edit: 138.2 fib extension hit to the pip @3394 before reversing.
Attached Image (click to enlarge)
Click to Enlarge Name: 7th Dec EU 5M 123 long.PNG Size: 39 KB
  • #155
  • Dec 7, 2010 4:13am Dec 7, 2010 4:13am
H1
1 entry to 1.57400 exit to 1.57900 +50pips
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H4
2 entry to 1.57900 target 1.59200 Now +25 pips
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  • #156
  • Edited 8:35am Dec 7, 2010 7:29am | Edited 8:35am
Quoting sidefx
...as price was heading down into 7am (GMT) the hunt for 123 long was on. I have this one as the first qualifier (as per Paulus' def), which is in long now from 3375. The 161.8 fib extension ties in with a Resistance Pivot, so if it gets there i'll take profit.

Edit: 138.2 fib extension hit to the pip @3394 before reversing.
...this morning's EU long still in play...

edit: stalling at the 138.2 extension (again). I think there's enough consistency with price interaction around this level to develop an exit strat. Once 138 tgts are hit, TP and reset the fib looking for the next 123, probably a continuation - isn't it the case that statistically the trend is more likely to continue rather than reverse.....or does this fly out the window on the 5M tf?
Attached Image (click to enlarge)
Click to Enlarge Name: 7th Dec EU 5M 123 long update.PNG Size: 43 KB
  • #157
  • Dec 7, 2010 9:54am Dec 7, 2010 9:54am
Quoting sidefx
...this morning's EU long still in play...

edit: stalling at the 138.2 extension (again). I think there's enough consistency with price interaction around this level to develop an exit strat. Once 138 tgts are hit, TP and reset the fib looking for the next 123, probably a continuation - isn't it the case that statistically the trend is more likely to continue rather than reverse.....or does this fly out the window on the 5M tf?

Hi Sidefx

I notice you have some MACD stuff on the bottom of your chart.

Since these 1-2-3 trades are often counter trend (or rather the beginning of a new 5 minute trend)......does that MACD indicator help? I know in this case ....the 123 trade that you took was also confirmed with the MACD indi.....but I am curious if you back tested it.

I have tons of various indicators I use for taking trades in the direction of the trend....but....(and correct me if I am wrong).....these 123 trades are the beginning of a new move....and the trend indicators will always lag

I notice Paulus has a line on his charts....not sure if it is some sort of moving average, or trend magic?

By the way, I really happy that this thread is going......I love the 123 pattern and am always looking for ways to learn to ride it.

PGPB
  • #158
  • Edited 10:29am Dec 7, 2010 10:12am | Edited 10:29am
Quoting pgpb
Hi Sidefx

I notice you have some MACD stuff on the bottom of your chart.

Since these 1-2-3 trades are often counter trend (or rather the beginning of a new 5 minute trend)......does that MACD indicator help? I know in this case ....the 123 trade that you took was also confirmed with the MACD indi.....but I am curious if you back tested it.

I have tons of various indicators I use for taking trades in the direction of the trend....but....(and correct me if I am wrong).....these 123 trades are the beginning of a new move....and the trend indicators...
I'm using the MACD indie more for decision support, it will often signal within a reversal zone and will often be in support of the developing reversal 123 (today's 5M long a case in point)...which, as we've been seeing can often take many candles to form.
  • #159
  • Dec 7, 2010 10:24am Dec 7, 2010 10:24am
Quoting sidefx
I'm using the MACD indie more for decision support, it will often signal within a reversal zone and will often be in support of the developing reversal 123...which, as we've been seeing can often take many candles to form.

thxsidefx

....and for those who will want to know where to get the indi....look here
http://www.forexfactory.com/showpost.php?p=4209125

PGPB
  • #160
  • Dec 7, 2010 10:28am Dec 7, 2010 10:28am
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