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How to use the 123 strategy effectively

  • #641
  • Jan 1, 2011 4:23pm Jan 1, 2011 4:23pm
Quoting Pipdealer
But whenever 123 forms, it looks always reversal just like Paulus doing?
I takes a while to train your eye to see 123s

In the image I have posted the first 123 is a reversal, (price had been moving up previously), but then if you substitute all the 3 threes for ones....then there are 123s all the way down.

(I have not written in numbers but all the blue dots could be either 1's or 3's)

Paulus trades ONLY reversals, (and he does so very successfully), after a short he will be looking for a 1 to go long

He says that the first reversal has the highest probability to move, and we never know if the 123s on the way down (or up) are going to move enough to give us profit

It is up to you how you trade.



PGPB
Attached Image (click to enlarge)
Click to Enlarge Name: 123.png Size: 15 KB
  • #642
  • Jan 1, 2011 4:27pm Jan 1, 2011 4:27pm
here is the charts with the 123s drawn in
Attached Image (click to enlarge)
Click to Enlarge Name: 123a.png Size: 11 KB
  • #643
  • Edited 6:00pm Jan 1, 2011 5:41pm | Edited 6:00pm
That is the123 patterns I am familiar with. They all appear during a trend. All point 2-3 are the retracements of a main downtrend. Also knows as Granville Rules.

Or is this the only pattern he trades with this system then? It did not seem that way though in his earlier posts.

First reversals I think he means the M-top or W-bottom of 123 in a trend. They really are big ones because there is only one way to go when they appear. OR could be the first retracement in a trend.

OK. I am asking questions because I wanted to know if 123 patterns are reliable equally on all occasions. I know they are during a trend.

Hey, I hope I am not confusing you all because I might be lol
A successful trading depends on knowing what to analyze.
  • #644
  • Jan 1, 2011 6:43pm Jan 1, 2011 6:43pm
Quoting Pipdealer
That is the123 patterns I am familiar with. They all appear during a trend. All point 2-3 are the retracements of a main downtrend. Also knows as Granville Rules.

Or is this the only pattern he trades with this system then? It did not seem that way though in his earlier posts.

First reversals I think he means the M-top or W-bottom of 123 in a trend. They really are big ones because there is only one way to go when they appear. OR could be the first retracement in a trend.

OK. I am asking questions because I wanted to know if 123 patterns are...
Paulus I believe trades 123's as reversals only (he can correct me if I am wrong). After he has a long trade set up he looks for a short and vice versa. Myself I trade both reversals and continuations. 123's are an easy set-up that are usually easy to spot and get in and out of with clear TP and SL based on the fibo.
Today's zone = Tomorrow's opportunity!
  • #645
  • Jan 1, 2011 7:18pm Jan 1, 2011 7:18pm
Do you mean while you ride on a trend and take reversals as you spot 123 points at the same time?

This might be a silly question but it is pointless to spot 123 in a range right? It's better for a breakout in there, I think...

So, when would be the best place/zone to find them? (again, sorry for a silly question )
A successful trading depends on knowing what to analyze.
  • #646
  • Jan 1, 2011 10:23pm Jan 1, 2011 10:23pm
Quoting Pipdealer
Do you mean while you ride on a trend and take reversals as you spot 123 points at the same time?

This might be a silly question but it is pointless to spot 123 in a range right? It's better for a breakout in there, I think...

So, when would be the best place/zone to find them? (again, sorry for a silly question )

it might be easier to read through the whole thread and all your questions are already answered multiple times, 50% of the thread discusses time zones, 70 % of the thread discusses where they are, trend, counter-trend).... there are a number of ways to trade the 1-2-3, Paulus has kindly shown us how he does it quite successfully, others have also kindly shown their methods as well. People have taken the time to post charts and other info so spend a few hours running through this whole thread and then come back with some NEW questions that haven't been asked before...
Catching a falling knife, no, I'm just trading the Gartley!
  • #647
  • Jan 2, 2011 1:47am Jan 2, 2011 1:47am
well, i think 1,2,3 strategy can work, but you need to have enough screen time with the market to feel if this is 1, 2 or 3 or just your imagination, people see what they want to see, sorry, i dont really have a concrete answer to this as i dont use this system particularly. low risk entry is low risk whether its 1, 2 or 3.
  • #648
  • Jan 2, 2011 5:36am Jan 2, 2011 5:36am
Actually I think I understand what Paulus said and his charts all in his posts. It's the other people's comments that made me confused.

It could be the fact I have been reading many 123 threads lately at the same time.

Anyway, I think I will just only focus on what he is trying to say and his method. I like this one a lot.
A successful trading depends on knowing what to analyze.
  • #649
  • Jan 2, 2011 7:20am Jan 2, 2011 7:20am
Quoting Pipdealer
Do you mean while you ride on a trend and take reversals as you spot 123 points at the same time?

This might be a silly question but it is pointless to spot 123 in a range right? It's better for a breakout in there, I think...

So, when would be the best place/zone to find them? (again, sorry for a silly question )
When a 123 is setting up I look to see if it is setting up in favor of a trend continuation or reversal. What happens in a ranging market is that 123's may set up but will usually not trigger, or will get invalidated when point 3 closes above or below point 1. Also with 123's you can make money whether the set-up is for 15 pips or 150.
Today's zone = Tomorrow's opportunity!
  • #650
  • Jan 2, 2011 7:24am Jan 2, 2011 7:24am
Quoting Pipdealer
Actually I think I understand what Paulus said and his charts all in his posts. It's the other people's comments that made me confused.

It could be the fact I have been reading many 123 threads lately at the same time.

Anyway, I think I will just only focus on what he is trying to say and his method. I like this one a lot.
I agree with ChinaWombat in that many ways have been covered in detail but you hit the nail on the head in that you need to focus and learn 1 way to trade 123 method before trying to expand to trading it different ways. Pick one way like Paulus's method of reversals and stick to it only and learn it inside and out. Just use other's posts to learn and see what they are doing but focus mainly on the reversal expamles posted while you study this method.
Today's zone = Tomorrow's opportunity!
  • #651
  • Jan 2, 2011 9:46am Jan 2, 2011 9:46am
Here is some wisdom from Joe Ross, read it internalize it, do it.


SETUPS


You only need to master one setup to be a consistently profitable trader.

Screen Time will allow you to master one setup.

After you have mastered one setup "OWN IT" then you can add another setup.

This can be an ongoing process developing your own style.

The best setup to begin with is the one that you see and understand easiest. If you are forcing yourself to learn a setup because you believe another person is successful using it you may be taking the longer route to profitability.

We are all different . Our brains and personalities will gravitate to different setups. This is also true of exit techniques.

Most traders I hear from lengthen their road to profitability by trying to apply too many concepts before owning the first one. They have studied a myriad of techniques but have yet to master any. This allows them to talk about trading but unable to consistently trade profitably.

The first decision to make is; do you desire to be a counter trend trader? or a with the trend trader? Eventually, you can be both.

At the beginning, or a new beginning perhaps, you will do best choosing to Master a setup and follow the trend.

If you have been at this game for awhile and are not yet consistently profitable you know what I am saying is correct.

PICK ONE, MASTER IT, AND BECOME CONSISTENTLY PROFITABLE
DO IT NOW
  • #652
  • Jan 2, 2011 7:18pm Jan 2, 2011 7:18pm
A little risky with the thinness of the market at this time but nicely in profit and still running with a 10 pip trailing stop.......
Attached Image
  • #653
  • Jan 2, 2011 7:23pm Jan 2, 2011 7:23pm
Hey Bigjim,

Good to see you on the thread. Hows the trading been?
PIP'N
  • #654
  • Jan 2, 2011 7:36pm Jan 2, 2011 7:36pm
Tradestar1,

good entry with the trend. What is your exit strategy?
PIP'N
  • #655
  • Jan 2, 2011 7:48pm Jan 2, 2011 7:48pm
just stopped out by trailing stop at 3299.
  • #656
  • Jan 2, 2011 7:59pm Jan 2, 2011 7:59pm
Very nice trade.
PIP'N
  • #657
  • Jan 2, 2011 8:01pm Jan 2, 2011 8:01pm
I am using a little of Feb's strategy from his system II with irony.

I also have a reversal order in position for the ride back up that will likely come in later this evening.
  • #658
  • Jan 2, 2011 8:13pm Jan 2, 2011 8:13pm
Yea, I am waiting for London to open so I can start looking for my short term trades. I have two open positions from daily's.
PIP'N
  • #659
  • Jan 2, 2011 10:55pm Jan 2, 2011 10:55pm
I think monday is another GBP and CAD holiday....
  • #660
  • Jan 2, 2011 11:28pm Jan 2, 2011 11:28pm
Oh that's right! I guess I will have a boring night coming.
PIP'N
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