123 Foreign Exchange Trading Strategy

The 123 foreign exchange trading strategy is a trend continuation exchanging structure established on the 1-2-3 chart pattern. That is 100% price action exchanging for a foreign exchange trading system.

Features

1. Perform on any timeframe but highly recommended to utilize 5 minutes and above.
2. Applicable on any currency pair.
3. It doesn’t require any foreign exchange indicators.
4. Position stop-loss to breakeven if your gain is the same value you risked.
5. Position stop-loss to lock in the value of gain equivalent to the value you risked earlier if your gain is twice the value you risked. For Instance, you risked $100 for an auction exchange. Now the gain is $200. So position the stop-loss and lock in $100 gain.
6. Or if the exchange is in the gain by the value risked, why not end the half of the position and establish the stop-loss to breakeven and let the other half position proceed.

The 123 Pattern

In an uptrend market condition, price will result three points (please refer to the diagram below)

1. Point one is the lowest low point, creating a support level.
2. Point two will be the highest or peak point, creating a resistance level.
3. And point three will be the second low point, a support level (which must be higher than the point 1 which is the lowest low point).

The breakout of price higher up point two signals the continuation of the market trend. Now, in a down trend market, the 1-2-3 chart patterns creates when:

1. Point one becomes the uppermost peak when price reaches resistance and proceeds down.
2. Point two becomes the lowest inferior point (creates support) and price proceeds up only to encounter another resistance at point three.
3. When price interrupts point two support level. Thus anticipating that the market is most likely to proceed downwards in a descending trend.

Auction Rules

1. Establish an auction stop order1-5 pips beneath point (2).
2. Establish stop-loss 1-5 pips higher up point (3).
3. Your gain aim should be established at three times the stop-loss length.

Purchase Rules

1. Establish a purchase stop order 1-5 pips higher up point (2).
2. Establish stop-loss 1-5 pips beneath point (3).
3. The gain aim should be three times the stop-loss length.

Utilize this strategy at your own risk. WindsorForex.com cannot be responsible for any losses associated with using any strategy presented on the site. It’s not recommended to use this strategy on the real account without testing it on demo first.