Can you confirm that a 123 trade, would be in this case, to short a break of 1.37177 and that a 2b trade would be to short a re-test of that level providing 2 candles have closed below that level first and that those 2 candles do not have any contact with that level whatsoever?
That question applies to the chart before it made a new high.
Let me try to explain the difference in the 123's and the 2b's using LOW closes. Reverse it for high's.
If I understand correctly, the 123 setup has the 1 as a low close, 2 is higher close than previous close high and 3 is somewhere between 1 and 2. The sequence then is, lower close, higher close, close between and then up.
A 2b happen on the way into a low. 1 makes a low close, 2 makes a higher close than the previous high close and 3 proceeds down into a new lower close, below 1 where it bounces and starts to make higher high closes and higher low closes. The sequence here is, a low close, higher close than previous high close and then a close below 1 and then up.
The difference is where the higher close is made to produce the second wave. 2b before the ultimate low close or 2 after the ultimate low close.
Both trade setups require 2 bars in a row ( 1 tick minimum) free and clear of the close or the high of either 2b or 2. Although the 123 can be traded when the price busts thru the 2 high if you chose to, but I don't see FX doing that trade.
FX could you correct these directions if I misunderstand. Thanks