Forex 1-2-3 Method

This particular technique has been around for a long time and I first saw it used in the futures market

Lets first start with the basic concept. During the course of any trend, either up or down, the market will form little peaks and valleys. see the chart below: Since then I have seen traders using it on just about every market and when applied well, can give amazingly accurate entry levels.

The problem is, how do you know when to enter the market and where do you get out. This is where the 1-2-3 method comes in. First let's look at a typical 1-2-3 set up:

Nice and simple, but it still doesn't tell us if we should take the trade. For this we add an indictor. You could use just about any indictor with this method but my preferred indictor is MACD with the standard settings of 12,26,9. With the indictor added, it now looks like this:

Now here is where it gets interesting. The rules for the trade are as follows:

Uptrend This works best as a reversal pattern so identify a previous downtrend. Wait for the MACD to signal a buy and for the 1-2-3 set up

Forex 1-2-3 Method

Information, charts or examples contained in this lesson are for illustration and educational purposes only. It should not be considered as advice or a recommendation to buy or sell any security or financial instrument. We do not and cannot offer investment advice. For further information please read our disclaimer