Opinion on 123 pattern

Hi fellow member

I may ask your assistant to have a look on below 123 pattern in the image...
There are 123 to the up and 123 to the down...I wonder which one would you take?

PS, Am I drawing the correct 123 pattern by the way?

I would also like to know the answer to your question. I know that this strategy is quite powerful but I get confused with where the (1) is supposed to start. Thanks for bringing this up.

Hi,

Larger patterns are generally believed to be more reliable than smaller ones.
That being said, I am not saying that I would trade any of the two.

Here is what I would do if I seriously wanted to start trading 1-2-3 pattern, or any other setup for that matter:

1. Read a lot about this patten. Search for it, here on FF and beyond. Read Joe Ross book law of the charts, it is free.
2. Learn and understand this pattern. What does it mean? What is happening in the market when it is being printed. Why it is supposed to work? Who feels fear and who feels greed? Where the unfilled orders are if this pattern is printed on the chart? Where the stop losses are?
3. Learn and decide how you would trade it. Where is the stop loss? Where is the entry order? Is this a limit, stop or market order? (for 1-2-3 I think they say stop entry at point 2, but...)
4. Find it on historical charts. Find 20+ occurences of this pattern on historical charts. Note down what happended next. How it would be good to trade it. Find occurances that paid and ones that did not pay (would end up in a stop loss). Take screenshots, copy them and review.
5. Backtest it. scroll back without lookng and go bar-by-bar (F12 in MT4) and look for the pattern. Imagine you are trading this. Note the result. Do at least 20 trades. Are you profitable? If not, repeat and learn, possibly adjust the approach. Yes , it is a lot of hard work. It is more like weeks vs. hours.
6. Forward test it. Once you are profitable trading this pattern on unknown historical charts, with no cheating, move to demo. Trade it on demo for at least 20 trades, but I'd recommend 40-100. Use equal dollar risk per trade position sizing so that results are not randomly impacted by trade size.
7. Checkpoint. Are you consistently profitable on demo? Do you trust in your ability to trade this pattern? If you said yes to all...
8. Start trading it live on a micro account. Set a position size to lose a small equal amount per trade. Trade it for 3 months or 40 trades at least, whichever comes last. Analyze your performance on myfxbook. You can start a journal here to stay motivated and get inputs from others.
9. Gradually increase your position size. If you are profitable on micro, slowly increase your trade sizes and keep trading and learning.

FYI, I am at a step 8 with a Supply & Demand H1 levels trading. You can check my journal and my blog if you wish, links on my profile page.
Good luck!

hi I try it(show123.mq4) on binary options demo account it gives good results till now , but can any one help me to have better results ? i would like to know the exact entry price of the next candle
when I am trading forex on 15tf the very candle am trading depending on 123 pattern ,the entry price is the problem the price goes up and down a lot in the candle
suppose I have a call candle , how do I know the minimum price in this candle befor I go long for the next 15m?