Web7/2/ · Wait for a breakout candlestick once you’ve identified the chart pattern. The breakout candlestick must breakout to the chart upside and close above point 2. WebWait for a breakout candlestick once you’ve identified the chart pattern. The breakout candlestick must breakout to the chart upside and close above point 2. place an MT4 buy 7/2/ · Wait for a breakout candlestick once you’ve identified the chart pattern. The breakout candlestick must breakout to the chart upside and close above point 2. place an Wait for a breakout candlestick once you’ve identified the chart pattern. The breakout candlestick must breakout to the chart upside and close above point 2. place an MT4 buy stop ... read more
This 3-step system is highly actionable and will mechanize your trading workflow. No more "paralysis by analysis". Uses mathematical wave and fibonacci models to predict where price is going.
System offers clear, high probability price targets so you don't have to guess when to close a trade. Peter Bain and Lennox Chambers created this system to help confused traders approach the Forex trading differently.
They want to make it simpler and more mechanical with less subjective interpretation of the rules. They created Simple Forex Trader with the goal of making Forex trading more accessible and less tedious. Lennox has been trading the S strategy for over a decade and recently applied these techniques to the Forex with spectacular success. Peter is the founder of Forexmentor.
com with 20 years of trading experience and has mentored thousands of Forex traders in the past 15 years. Simple or S is a 3-step, rule-based Forex trading strategy created by Lennox Chambers and Peter Bain. S helps Forex traders to locate, enter and exit trades across all timeframes. This unique trading system offers guidance to traders to not only know where to enter trades, but where to exit trades.
Click here to see some recent real trades. Real Trades Live Trading Auto Trading Email Alerts Testimonials FAQ Join. WHY Simple Forex Trader? RULE-BASED The system rules are unambiguous, logical and objective. The stop loss is put just above point 3, whereas a more conservative stop loss is placed just above the move, in order to maximize the risk to reward. The trader will be able to make this choice by trading the pattern again and again.
Let us understand the step by step process of the strategy. In this example, we are applying our strategy on the 15 minutes time frame and during one of the major trading sessions. The first step of the strategy is to look for point 1, which is essentially the highest point of a trend. In our example, we can see that the previous lows have been tested multiple times, and thus we have chosen the highest point as our point number 1. The next step is to mark the point number 2.
When the market pulls back to the recent support or resistance area after reacting from point 1, we mark this as point 2. Remember that the price should not only reach that area but also react and move higher for uptrend or lower for downtrend. This confirms the key technical level.
The formation of the pattern is complete after identifying the third point. When the market moves in the area between points 1 and 2 and later comes goes back to point 1, the point from where the market reversed becomes our point 3. The first one is an aggressive way to take an entry on a break of point 2, and as the market starts moving in that direction.
This gives additional confirmation that the market is ready to go in a favorable direction. In this case, we have entered the market right after point 2 is broken, which is a little aggressive.
Finally, we need to determine our stop-loss and take-profit levels for the strategy. The take-profit is placed at a point where the resultant risk to reward is at least However, if there is a hurdle in between, profits can also be taken at such points. The pattern is a major trend reversal pattern is one of the best strategies for trend reversals. One can trade using this strategy on any time frame.
The strategy is based on the idea that the market is losing momentum in the direction of the major trend and could reverse any moment. The probability of this strategy is high and does not require knowledge of technical indicators. Save my name, email, and website in this browser for the next time I comment.
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The Forex trading strategy is based on price action and normal Forex market structure that any trader should know. The 1 2 3 trading strategy is used as a continuation trading setup that is designed to take advantage of the trend of the market. The failure of the trading strategy is also a trade setup but can also warn you of potential price consolidation in the market or even a trend reversal in whatever Forex pair you are watching.
Keep in mind that even though it is a continuation pattern upon confirmation, it is also a reversal pattern from the short term trend direction. In any trending market, there is a pattern of higher highs and higher lows. In order for the trend to the upside to remain active, each successive impulse swing must take out the point 2 in the formation. When price surpasses the price at 2, the trader can use that as confirmation that the 1 2 3 chart pattern is present. This is a line chart that explains the concept of the 1 2 3 trading pattern and in this case, we are assuming an up trending market.
Please note that the 1 2 3 price pattern is only confirmed once the high at point 2 is taken out by price. You can also see that the 1 2 3 trading strategy is taking advantage of the stair step nature of the market that is needed if a trend is going to continue. It is at the confirmation of the patter that a trader can place a conservative trading position in the market. We will look at a conservative method for those traders that need a little extra confirmation in their trades. Keep in mind there is a cost involved.
The longer you wait to get involved in a trading position, the larger you will have to make your stop loss. You should be familiar with the numbers and what they represent on the chart. We can see that price rallied from point 3, found resistance at point 2 and retraced.
We now have a double bottom chart pattern and just as the 1 2 3 trading strategy needs a breach of 2 to confirm the pattern, so does the double bottom.
If you do get a double bottom after a move in price, that could signify weakness in the market. If bulls were fully in chart during the retrace at 2, we should not see two shots at the level 3. Price breaks above 2 and you can either enter at the breakout or, my preference, take a position at the close of the candlestick to confirm a true break. You can also put an order to buy slightly above the candlestick that broke the 2 level.
Your stop loss should be below 2 with buffer room to allow for noise. You can also, my preference is coming, use a 14 period Average True Range x 2. Price rallies from 1 and gives us a strong reversal candlestick at 2. Once price begins to retrace, put this currency pair on your radar.
Price find support at 2 inside the previous consolidation pattern from trade 1 and shows strength as it rallied to 2. Once price shatters the 2 price zone, enter at the close of the daily candlestick or whatever time frame you are using and use an ATR stop. The average true range stop for this trade would actually be in the middle of the candlestick that printed just before the breakout candlestick.
We have most variables need for the 1 2 3 trading strategy but price is forming a range near the level at 3. When price is basing in this fashion, it shows that the side that was dominant, in this case bulls, have tired. As a trader for years, I have seen the following occur:. This formation of the consolidation is also a great trade entry into the potential of the 1 2 3 chart pattern continuing.
We can position early in the 1 2 3 formation when we have basing occurring. Ideally, we would like to see some form of basing near the resistance level red line. You can see the green dashed line and then price rockets to resistance. The more favorable setup is to have either basing near the extreme or a slight pullback in price which we see with orange box. The break out then occurs after that pullback. Those types of breaks are more effective and see if you can understand why.
Some would think the first break would carry more weight because the drive started midway in the range.
But traders who positioned lower will also look for scalping Forex trades at the top of the range — is that not how you play a range?? The breakout that occurs is driven by traders who went long at the bottom of the range.
As discussed, you can enter at the close of the break out candlestick signal candlestick or entering your trading position at a break of the high. Some traders may want to use a multiple time frame approach and enter on a lower time frame. In my own trading and in my years as a trader, I look to simplify. Entering at close or breaks of support levels or resistance levels highs and lows of breakout candlesticks is my favored entry.
Some traders would like to see specific price targets to add to their trading plan. Other traders see the power of trailing their stop loss to take as much as the market is willing to give. I color coded each swing so you can see where I am measuring from. You can see the first two trades nailed the targets. The third trade hits the. The 1 2 3 trading strategy is a pure price action trading method that uses a sound approach to trading.
This is a line chart that explains the concept of the 1 2 3 trading pattern and in this case, we are assuming an up trending market 1 2 3 Trading Strategy. RELATED 3rd Short Candlestick Forex Trading Strategy. Front Running. RELATED The Outside Bar Forex Trading Strategy. One to One Targets. Prev Article Next Article.
Wait for a breakout candlestick once you’ve identified the chart pattern. The breakout candlestick must breakout to the chart upside and close above point 2. place an MT4 buy stop Web7/2/ · Wait for a breakout candlestick once you’ve identified the chart pattern. The breakout candlestick must breakout to the chart upside and close above point 2. WebWait for a breakout candlestick once you’ve identified the chart pattern. The breakout candlestick must breakout to the chart upside and close above point 2. place an MT4 buy 7/2/ · Wait for a breakout candlestick once you’ve identified the chart pattern. The breakout candlestick must breakout to the chart upside and close above point 2. place an ... read more
Let us understand the step by step procedure of the strategy with the help of an example. The Pattern How does a pattern form in a downtrend and uptrend market? The first one is an aggressive way to take an entry on a break of point 2, and as the market starts moving in that direction. But I rejected all of that. That's why the initial trend is very important. At the bottom left part of the chart, we had initially rallied from the 1. place a sell stop pending order pips above low of breakout candlestick place your stop loss pips above the high of the breakout candlestick.
As the market continues to drop, they unload those positions to the smart money - who are more willing to buy as the price drops lower. To the left you see a potential setup happening. The pattern is complete when the price stays below point 2, 123 forex trading strategy. The next step is to mark the point number 123 forex trading strategy. The top and bottom pattern is a very powerful pattern that signals a trend reversal. place a sell stop pending order pips above low of breakout candlestick place your stop loss pips above the high of the breakout candlestick.