1-2-3 Strategy Thread

After trading for a year and a half in the Forex market and never really getting ahead, I figured I would start posting live trades based on one of the easiest and accurate price action strategies that I've used.

I don't use indicators in my trades, however, I do keep the RSI and Stoch's on my charts simply for extra confirmation if needed.

My trading experience started over 6 years ago, I have taken many courses and professional lessons on price action and also I've learned many proprietary patterns and techniques, I will not disclose these here because then they wouldn't be proprietary now would they?

As for money making its been a different story, I like to blame it on me having a full time work load (I'm self employed) and the ability to focus and get precise entries never seems to work out even on the higher time frames. In my discussions with professional Forex traders, they say that when done properly, you should be making an average of 5 percent per month based on a 1% risk profile. Never risking more then 2% and low probability trades at .5%.

On the bright side I've never "blown" an account and have stayed pretty much flat in my account for almost 2 years. Last I checked I'm down maybe 8% since the start which isn't to bad, most of those losses were because of a few systems that I tried in the beginning that flopped, since then I can say I'm even or slightly in the green.

Well enough about me and lets get to the charts. These trades will be based on the 1-2-3 strategy that can be found on a google search. Although I have made some modifications to fit my style a bit better.

Update 12/5/13: This discussion is primarily dealing with price action and market harmonics, so any input with this subject in mind is appreciated.

Here is a few charts to start off with. As well as some charts that I'm watching and waiting to enter. These trades will be done on a 1 hour+ time frame with some day trading when time permits. Please feel free to add input and converse, it should be fun.

This chart shows the Pound setting up for a potential short. Lets wait and see. Price needs to close below the 2 point then entry should be on the retest of the 2 Point.


Here is an example of a classic short entry with retest.



Sometimes the price does not retest, an entry can still take place but the risk is higher, so use a smaller position size. Look at the below example.



Attached chart showing the loonie for trade illustration purposes.

Attachment

Entry might happen here...

Another chart that I'm watching.

maybe this will help.........adding a couple of moving averages to help with the trend, angle and separation, impulsive candles at pic hours, like London open, new York, break outs happen at those hours and the 1,2,3 happens with more power.......look for a confluence of events, good luck, nice thread.......

http://www.forexfactory.com/showthread.php?t=106165

Hi gaz:

I like divergences. I trade divergences with Rsi 3 at H1 tf but with some rules.
I use weekly pivot point to determine trend. When Price is above weekly pivot i only take buy entries. When Price is below weekly pivot i only take sell entries.
I look for two diferents tp.
Normally tp1 is the more near weekly/monthly support/resistance or RN. Normally 1:2 r:r. When tp1 is reached i move SL to BE.
Tp2 is the next weekly/monthly s/r. Normally 1:4 or more.
This chart is a trade i took yesterday. Today tp1 was reached this morning (+62). Half position will continue open untill reach 0.9000 (+122 pips).

Divergences Works well.

Hello
Could u elaborate a bit about your stop loss levels and Take profit levels?
thanks

nice trading........

Hi:

I forgot to draw all potential entries. Without candles noise is very easy to see. Potential next trade is too risk. Average daily range is so large.

Regards.

Nice charts Jaque,

Well last night I had both good and bad.

My EUR/GBP 1-2-3 pattern played out well.



My pound trade is sour so far. News hit and filled my limit order. We do have a close below the 2 point on a 1 hour chart so I will hold until I get stopped out.

Entered just now, the 1 hour closed below point 2.

Was this referring to me?

If so here's the answer.

Initial stop top loss is always below point number 3.

1st target is always the distance between point 2 and point 3.

This gives us a R/R of 1/1.

I have found that the 1st target gets hit quite often, once in a while you'll get big movers, but if you have a 60%+ win rate, a 1/1 R/R should be fine.

Also, depending on the time frame, a break even stop should be in place after 50 pips or so. Sometimes the price will retest and if that's the case you get out at break even. You can always re enter at a fib level with a better R/R.

Major Divergence in the aussie, I will wait for a 1-2-3 to form before entering long. Since the divergence is there, I assume this is a higher probability trade and will enter for more then 1 target.

yes it was intended for u. and thanks for the input

One more question. Do u generally enter at the break of point two or pull back to the point two (in your chart I c u enter at the close of the point two. is that the normal scenario)?
thanks

To be honest I still haven't figured out the best way but I'll tell you what I've noticed.

To wait for a pullback to point 2 gives you a better entry and better R/R, however the market doesn't always retest, many times it just keeps going.

So it really depends on the close of the initial break. I kinda just eye ball it and if the close is to far from point 2, I'd wait for the retest. Although sometimes, like I said, the retest never comes and you miss out on a multibagger. A safer way would be to enter with a half position instead of waiting for a retest.

The key for me is enter on the close of the candle no matter what, the banks love to play games with their stupid spikes. Trust me, I've been shown strategies to take advantage of these spikes, problem is that my time permits me from sitting for 6 hours from 4:30 am to trade.

Ill give you a few charts to look at.

Hopefully here's another set up forming.

Euro Daily setting up too

Very good thread. I really like the simplicity of your charts

Thanks William,

I missed this move because it happened at 4 AM my time, but oh well...Still holding the other positions so will see what happens.

Here's a recent example of a trade that I missed. You can see we didn't hit the first target, my first thought to protect ourselves from this, a breakeven stop should be placed when price has reached 50% of the distance to the first target. By visually back testing this, I notice that this will probably give you a higher winning percentage, however, you may miss out on the big move occasionally. I have no stats to back that up but it's what I'm seeing so far...Feel free to comment.