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How to use the 123 strategy effectively

  • #1,421
  • Mar 21, 2011 11:25pm Mar 21, 2011 11:25pm
Quoting simpletrades
Thanks, i lean towards it counting too.
Its interesting that you mention the 23.6 because I started trading oil or wanted to--Transact has been screwed up the last 2 days so live trading was not a choice--but on such a volatile chart as the 30 sec, i have been trying to decide if a number 3 close past the 50% should kill the setup or not. Maybe i'll replace 50 with 23.6 and see how it played out.
30 second chart??? wow you like to see a lot of noise. My nerves would be shot.
  • #1,422
  • Mar 22, 2011 5:57am Mar 22, 2011 5:57am
I've been experimenting with Renko and the 123 pattern, got some interesting results, wondering if anyone else tried Renko?
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  • #1,423
  • Mar 22, 2011 6:51am Mar 22, 2011 6:51am
Quoting tommbstone
30 second chart??? wow you like to see a lot of noise. My nerves would be shot.
to the contrary, enter with buy/sell stops because it does fly, but preset the profit to 161.8 or 200--you can always flatten sooner.
if anything, knowing that it only takes a minimum of 90 sec (3 bars) to get from point 2 to the entry since point 3's bar can also be the entry bar, it eliminates forced trades because mentally you know there is another possibility coming along soon. the only thing is i ignore paulus' alternating L/S entries requirement because it is impossible to track every bump up and down.
  • #1,424
  • Apr 4, 2011 8:39pm Apr 4, 2011 8:39pm
Hi from newbie, I have just ridden all this thread, what a good one! Hope this thread is not dead, 15 days without any posts... Maybe the last few weeks are not as good as before for this method, so that s why this thread is not alive anymore..? I think the paulus 123 method is more efficient with a consolidation market like last few months. But, the cycle seems to be changed, it's rather a tendency so there are less consolidations nor pull back, so strategy based on reverse is riskier. Maybe it s more profitable to use 123 with the longer term trend now and to filter drastically the reversal patterns. And we have to be very careful with ugly range!!! Adapting his trading style according the market s feelings is maybe the key. Thanks for sharing your method, you opened my mind...
  • #1,425
  • Apr 5, 2011 6:53am Apr 5, 2011 6:53am
Quoting biglebowski
Hi from newbie, I have just ridden all this thread, what a good one! Hope this thread is not dead, 15 days without any posts... Maybe the last few weeks are not as good as before for this method, so that s why this thread is not alive anymore..? I think the paulus 123 method is more efficient with a consolidation market like last few months. But, the cycle seems to be changed, it's rather a tendency so there are less consolidations nor pull back, so strategy based on reverse is riskier. Maybe it s more profitable to use 123 with the longer term...
i'm not going to post anything on them, but look up guppy multiple moving averages (GMMA) there are lots of links on the web.
it can be a great filter if you plot the 12 averages in a separate panel under the candles not over them. it takes a lot of time to just scroll back on symbols and looking at relationships so you can pick them out.
  • #1,426
  • Apr 5, 2011 7:17am Apr 5, 2011 7:17am
Quoting forex1962
I've been experimenting with Renko and the 123 pattern, got some interesting results, wondering if anyone else tried Renko?
Haven't tried Renko but am interested in hearing more about your results. Can you tell us more?
  • #1,427
  • Apr 5, 2011 8:47pm Apr 5, 2011 8:47pm
Hello all : I am new to the site , and happy to find a group that trades the 1-2-3 patterns .

I have been trading the pattern exclusively for about 9 months now using a renko chart .

I only trade the EU ..looking forward to exchanging ideas ..

Chappy
  • #1,428
  • Apr 29, 2011 12:29pm Apr 29, 2011 12:29pm
Is Paulus still with us? Curious to see how his results have been lately.
  • #1,429
  • May 5, 2011 7:40am May 5, 2011 7:40am
Hey guys...

any one trading this strategy?
  • #1,430
  • May 5, 2011 8:54am May 5, 2011 8:54am
Quoting ForexSV
Hey guys...

any one trading this strategy?
I'm still trading it though mainly with futures rather than forex as the spreads are minimal. Both oil and gold 1 minute charts give very good results
Dream big, start small. Have it all
  • #1,431
  • May 10, 2011 11:33pm May 10, 2011 11:33pm
Quoting sean007
I'm still trading it though mainly with futures rather than forex as the spreads are minimal. Both oil and gold 1 minute charts give very good results
screen shots please?
  • #1,432
  • Edited Sep 6, 2011 2:50pm Sep 5, 2011 4:26pm | Edited Sep 6, 2011 2:50pm
http://i1188.photobucket.com/albums/...123-5-9-11.jpg

No trading signals on the EU
But on the GU, the signal took a while but did eventually come. I did move SL to BE at one stage with a view to maybe looking at a 100% level but then decided against it, which on reflection was a good move.

Been following this strategy for a while now and thought that I'd post my daily results for any constructive feedback please.

Best regards

Paul
  • #1,433
  • Edited 3:23pm Sep 6, 2011 3:03pm | Edited 3:23pm
http://i1188.photobucket.com/albums/...123-6-9-11.jpg
Wow what a day!!!

Looking for 123 up signals, but none matching the criterea appeared for me today.

Anyone else currently trading this method?

Best regards


Paul
  • #1,434
  • Sep 7, 2011 6:06am Sep 7, 2011 6:06am
Quoting Namloh
http://i1188.photobucket.com/albums/...123-6-9-11.jpg
Wow what a day!!!

Looking for 123 up signals, but none matching the criterea appeared for me today.

Anyone else currently trading this method?

Best regards


Paul
++++++++++++++++++++++++++++++++
Hi Paul. This thread gave me a foundation for seeing 123's. Good info here. Since learning this, I've seen various interpretations. The way it's described here is a very specific in it's application. These rules have been modified for use in some methods.

I know use 123's mostly to verify changes in direction or opportunities to re-enter a trade. Any way you choose to use 123's really helps.

These pages have some nice charts which I printed up and stuck on my monitor.
123's - http://www.trading-naked.com/123-reversal.htm
and a close cousin called 2B Reversals - http://www.trading-naked.com/2b-reversal.htm
Good Hunting,
Darryl
  • #1,435
  • Edited Sep 8, 2011 5:06am Sep 7, 2011 4:04pm | Edited Sep 8, 2011 5:06am
http://i1188.photobucket.com/albums/...g1237-9-11.jpg

Another tough day at the office.

No signals on the EU

One on the GU, it was quite a large move due to the big spike up, so this made me a little cautious.

I watched it all day and it eventually came into profit. I then broke the rules (oh no) and moved my SL to BE when it was about 30 pips in profit. On this occasion it was a good move, as of now it has retraced back above my entry position, having come within approximatly 10 to 15 pips of the moves TP.

So on the one hand I'm not happy about breaking the rules but on the other hand happy not to have lost. So a funny sort of day really.


Hi Darryl, thanks for your reply and the links, I will check these out to improve the trading.

Having read this thread, I am trying to follow it to the letter. It's just breaking even for me at the moment, but I can see it's potential.

What's been your experience?

Best regards


Paul
  • #1,436
  • Sep 7, 2011 7:26pm Sep 7, 2011 7:26pm
Good to see some 123 traders posting again..

I use the 123 in combination with a MA ...

I'm using a renko chart with the line display , the pattern shows up very clearly ..( this , however was not a 123 trade , but rather a MA cross )..

Good trades to all ...........
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  • #1,437
  • Sep 8, 2011 2:34am Sep 8, 2011 2:34am
Quoting Namloh
http://i1188.photobucket.com/albums/...g1237-9-11.jpg

Another tough day at the office.

No signals on the EU

One on the GU, it was quite a large move due to the big spike up, so this made me a little cautious.

I watched it all day and it eventually came into profit. I then broke the rules (oh no) and moved my SL to BE when it was about 30 pips in profit. On this occasion it was a good move, as of now it has retraced back above...
++++++++++++++++++
Hi Paul. After 1st reading this thread, I was all about trading it within the "Letter of the Law" as well. Since that time I've spent time studying the use of 123's within other methods and have seen that it can be quite effective without the counting bars, and without using it for price projection "Mandates". Now, I use 123 mostly as a signal.

I see your posting a 5m chart. Dude, if your 30 pips in profit based on a 5m trade and you're not banking some money, you could be greatly hurting your chances of being profitable in the long term.

Are there several 30 pip moves everyday? Of course there are. Think about breaking that down;
Daily number of:
• 10 pip moves compared to,
• 15 moves compared to,
• 20 moves
• 25 and so on. I don't know the percentages of these moves but I will wager any amount of money that the shorter moves are much more prevalent.

If you are trading on 4hr or daily charts then, yes. 30 pips would not carry the same weight as it would on a smaller TF.

Look at ways to extract pips out of the market using this method as part of your strategy. On a particular strategy I use, I've found that it's quite likely that 61% of my price projection will get hit. So I base my money mgmt. on this target and typically close at least 60% - 80% of my position.

This works for me. You need to look at what really makes sense to you.
Darryl
  • #1,438
  • Sep 8, 2011 5:25am Sep 8, 2011 5:25am
Hi DARRYL, (apologies for getting this wrong earlier, now amended)

Big thanks for your feedback, it is really appreciated and hoping to learn as much as I can

It does hurt to see a good in profit trade fail due to not just quite hitting TP.

But I've also had many an experience of moving my SL to BE, get taken out only to then watch price go on to far exceed my original TP without taking out my SL.

What I like about this system is that I don't have to think too much about where I place the orders to buy/sell along with the SL and TP. I also don't have to think about ups and downs between these points. If I understand what you are saying, the decision of when to TP seems variable and I don't really want to be doing this. Too much thinking for a simple soul like myself.

Anyhow, keen to know what other systems you use along with the 123 and how you are getting on with them.

Thanks again Darryl

Regards

Paul
  • #1,439
  • Sep 8, 2011 4:28pm Sep 8, 2011 4:28pm
http://i1188.photobucket.com/albums/...123-8-9-11.jpg

EU
Was looking for a trend reversal from the overnight market which was down. So I was looking for a 123 signal up. The first signal, I took was a loser. With hindsight it could be said that I was perhaps a little to anxious to get in, as he number 3 point was slightly dubious. The low could be considered as only just being equal to the 2nd bar between the points 2 and 3.


Therefore if I had not taken this point 3 as the low, then then next point 2 would not have been passed and this would have kept me out, as price did not pass point 2 again. Maybe a lesson to be learned here?.


GU
Great trade, looking again for a trend reversal of the overnight market which was down. So I was looking for an up 123. Which came and then went on to reach the 150% level, which I do not do yet as my plan is to do the first 123 of the day and then be out for the rest of the day. If I can get a 5% winner before noon each day then I am a happy chappy.


Note to Darryl, today on the GU was a perfect example of me not TP too early. As you can see the trade was entered about 11:30 am. With big UK news coming out at 12, price hovered between my entry and about 5 to 10 pips below my take profit. I thought of your advice about taking the profit but decided to stick with it. It was hard because I had already lost on the EU above and did n't want another loser. So in the end, I stuck to the rules of only taking profits at the amounts I had initailly risked and it paid off this time!


Hope that this makes sense.


Happy trading to all.

Best regards

Paul
  • #1,440
  • Sep 9, 2011 7:52am Sep 9, 2011 7:52am
Namloh, this is a thread that really helped me to start seeing price action and not indicators. I still use it, along with a couple of MAs, trendlines, and candlestick recognition. Anyway, here is the chart for EU after NY open. Very easy points, as far as this market goes. I have always set my stop for the 161.8%, not 200% like Paulus did. Also, the important thing about this chart is to recognize that the 161.8 of the counter matches the DS1 pivot, AND the 38.2% retrace of the larger move down.
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