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How to use the 123 strategy effectively

experimenting with the classic 123 setup: this is a 123 long trade on eur/jpy set at constant range bars 7, with Heiken Ashy. it's an aggressive entry before the break of point 2, based on the long and flat-bottomed HA body, which signals buying strenght. my sl was at point 3.

this time i went for a mere 1:1 r/r, as i hardly know this pair. obviously, as confidence grows, i'm planning to improve on this.
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Target 1.37070
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Hello everyone.

I have just finished reading this threat and stared trading on demo today. Had some nice trades + 108 pips.

I have one question what does Paulus mean with this rule: If I take a short 1st thing then the rest of my trades go long short long short etc?
Does he mean by pair or all trades by this rule? ( like if EU on short then GU long or I can go short on GU to?)


 Best wishes,


 D.
Quoting danel
Hello everyone.

I have just finished reading this threat and stared trading on demo today. Had some nice trades + 108 pips.

I have one question what does Paulus mean with this rule: If I take a short 1st thing then the rest of my trades go long short long short etc?
Does he mean by pair or all trades by this rule? ( like if EU on short then GU long or I can go short on GU to?)


 Best wishes,


 D.

Hello Danel

He means by pair. So, if his first trade on EU is a short then his next on EU will be a long. The reason is this is a reversal strategy so if you had two shorts in a row then the second trade would be a continuation.

The only caveat is in the case of a failed trade - so if you placed a short and your s/l was hit that means the trend is still long, so you would still be looking for a new short.

Hope that makes sense!
Quoting danel
Hello everyone.

I have just finished reading this threat and stared trading on demo today. Had some nice trades + 108 pips.

I have one question what does Paulus mean with this rule: If I take a short 1st thing then the rest of my trades go long short long short etc?
Does he mean by pair or all trades by this rule? ( like if EU on short then GU long or I can go short on GU to?)


 Best wishes,


 D.
congratulations on your green pips, danel. paulus alternates trades on same pair: for instance, e/u: if 1st trade is long, then 2nd is short, 3rd is long and so on... usually, but not always, correlated pairs will have same structure, but it could happen that while e/u 1st trade is a long, g/u 1st trade is a short. in this case you would alternate according to the pair, and the 2nd trade on e/u would be a short, while 2nd trade on g/u would be a long.

if sl is hit, you look for trades in the same direction of the failed trade.

also, he keeps each time frame independent on the count.

hope all is clear.
Hello.

Yes it's clear now thank you bubola and Delite
I'm on demo for some time and if this system is clear for me then I'l try live.
Hope you had a nice day.

Best wishes,

D.
Quoting bubola
experimenting with the classic 123 setup: this is a 123 long trade on eur/jpy set at constant range bars 7, with Heiken Ashy. it's an aggressive entry before the break of point 2, based on the long and flat-bottomed HA body, which signals buying strenght. my sl was at point 3.

this time i went for a mere 1:1 r/r, as i hardly know this pair. obviously, as confidence grows, i'm planning to improve on this.
I have seen other trader enter just below point 2 (in case of long) and above (in case of short) too.

Why is that? Isn't the traditional way to enter is above point 2 (for long entries). I mean the whole point is to enter when price brakes the nearest resistance point which is point 2. Or am I missing something?
Quoting vicious
I have seen other trader enter just below point 2 (in case of long) and above (in case of short) too.

Why is that? Isn't the traditional way to enter is above point 2 (for long entries). I mean the whole point is to enter when price brakes the nearest resistance point which is point 2. Or am I missing something?
no, you're right. entry at break of point 2 is certainly safer. but there are some traders who will anticipate the entry when there's a strong candle confirming a HL for long or LH for shorts - look for vantage's thread here in FF.

also, although riskier, r:r is better. for my personality, i prefer to enter earlier on a strong candle, since TP is closer. again, that's just me.
Quoting bubola
no, you're right. entry at break of point 2 is certainly safer. but there are some traders who will anticipate the entry when there's a strong candle confirming a HL for long or LH for shorts - look for vantage's thread here in FF.

also, although riskier, r:r is better. for my personality, i prefer to enter earlier on a strong candle, since TP is closer. again, that's just me.
I agree. Closer TP with aggressive trading is my style as well. If a 123 is big one, I like to enter early.
A successful trading depends on knowing what to analyze.
Here are my trades for the day...

So far I have taken and won a 123 and a 2B set-up... I am currently in another 2B set-up on the EURGBP after the successful 123.
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Today's zone = Tomorrow's opportunity!
On you're CHF trade it looks like a valid 123 long setup yet you took a 2B short. Can you explain the difference please

Many thanks
Nice trades Pres, I just manged this 2B setup today and achieved 1:1. Of course I could have got more but sticking with 1:1 for the moment. As well as the 2B setup we were also at resistance on higher timeframes from the high of the Asian session.
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Dream big, start small. Have it all
Quoting pres78
Here are my trades for the day...

So far I have taken and won a 123 and a 2B set-up... I am currently in another 2B set-up on the EURGBP after the successful 123.
TP hit finally... didn't look good since price retraced all the way back to entry after coming to within 1 pip of my TP... it hit on the second go up.
Today's zone = Tomorrow's opportunity!
1 win on EU for me 5% gain
and 2 wins on GU 10% gain so a nice day

P
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another 5% win

P
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Hello.
Paulus I have a question what fibo do you use that shows the prices where the fibo levels are, I use MT4 standard fibo?

Best wishes,

D.
Hi

I use the mt4 one also

If you double click and go to fibo properties if you want to display the price on for example the 100% line just make sure it reads in description column

100 %$

cheers

P
Hey.

Thanks Paulus.
I have a question about your MM how do you calculate your 5% from your account, do you calculate it before every trade or do you calculate it once a day, week?

Best wishes,

D.
Quoting danel
Hey.

Thanks Paulus.
I have a question about your MM how do you calculate your 5% from your account, do you calculate it before every trade or do you calculate it once a day, week?

Best wishes,

D.
You have to calculate before each trade..you can use a simple spread sheet or just pencil and paper ..its not exact as your fill may be a few pips out but its 99% correct

cheers

P
here are 2 very good calculators for working out your trade size

P
Attached Files
File Type: xls position size calculator.xls   8 KB | 328 downloads
File Type: xls Risk Calculation.xls   27 KB | 321 downloads
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