1-2-3 Forex Reversal Pattern Strategy

If you’re looking for a very profitable forex pattern that can be seen on all time frame’s and currency pairs, then look no further.

It’s called the 1-2-3 trading pattern and forms on every market turning point.

The 1-2-3 Forex Reversal Pattern strategy offers traders buy and sell signals based on the popular 1-2-3 pattern and the much needed flexibility and simplicity.

Chart Setup

MetaTrader4 Indicators: Figurelli Series.ex4 (default settings), Fibonacci Retracement tool*

*Here’s how to insert the Fibonacci Retracement tool directly from the Metatrader 4 platform.

Preferred Time Frame(s): 1-Minute, 5-Minute, 15-Minute, 30-Minute, 1-Hour, 4-Hour, 1-Day

Recommended Trading Sessions: Any

Currency Pairs: Any pair

Download

Download the 1-2-3 Forex Reversal Pattern Strategy

Buy Trade Example

Fig. 1.0

Strategy

Long Entry Rules

Initiate a buy order if the following indicator or chart pattern takes precedence:

  1. If the 1-2-3 forex pattern forms in the midst of a downtrend as seen on Fig. 1.0, with price finally breaking above the peak level labelled 2 (marked with the black horizontal line), price is said to be on its way up i.e. a buy order.
  2. If the red histograms of the Figurelli Series.ex4 custom indicator aligns above the 0.00 signal level as illustrated on Fig. 1.0, the market sentiment is said to be bullish, hence a trigger to go long on the designated pair.

Stop Loss for Buy Entry: Place stop loss below immediate support.

Exit Strategy/Take Profit for Buy Entry

Exit or take profit if the following rules or conditions are in place:

  1. If price breaks below two consecutive Fibonacci retracement levels, then price can be said to be experiencing downward pressures i.e. a trigger to exit or take profit at once.
  2. If the histograms of the Figurelli Series.ex4 custom indicator align below the 0.00 signal level, price is said to be pushed lower, hence a trigger to exit or take profit without delay.

Sell Entry Rules

Enter a sell order if the following indicator or chart pattern are on display:

  1. If the 1-2-3 forex pattern forms in the midst of a uptrend as depicted on Fig. 1.1, with price finally breaking below the bottom level labelled 2 (marked with the black horizontal line), price is said to be on its way down i.e. a sell order.
  2. If the red histograms of the Figurelli Series.ex4 custom indicator aligns below the 0.00 signal level as seen on Fig. 1.1, the market sentiment is said to be bearish, hence a trigger to go short on the designated currency pair.

Stop Loss for Sell Entry: Place stop loss above immediate resistance.

Exit Strategy/Take Profit for Sell Entry

Exit or take profit if the following holds true:

  1. If price breaks above two consecutive Fibonacci retracement levels, then price can be said to be experiencing upward pressures, thereby triggering a possible exit or take profit.
  2. If the histograms of the Figurelli Series.ex4 custom indicator align above the 0.00 signal level during a bearish alert, price is said to be pushed higher, hence a trigger to exit or take profit at once.

Sell Trade Example

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