1-2-3-4 Forex Reversal Trading Strategy
A 1-2-3-4 reversal chart pattern is build up of 4 definable points, known as point 1, 2 , 3 and 4. A typical 1-2-3-4 chart pattern is best traded after a strong currency pair up - or downtrend and can be defined by an easy set of trading rules.
A trader can confirm the reversal trade using a technical indicator such as DMI or MACD. (or other ones)
1-2-3-4 Basic Rules for Short Trades
Point (1): The high in an up trending currency market.
Point (2): A downward correction in the up trend, the lowest bar in the correction before the price moves back up to point (3).
Point (3): The high in the move up from Point (2) but a failure to make a new higher high(Point 1).
Point (4): Go short 1 pip below point (2)
Daily chart of GBPAUD shows and example of a sell 1-2-3-4 Reversal Trading Strategy, with a 1: 5+ Risk Reward setup. 50 pip stop and 285 target.
This would have been a six day trade, but can use this same strategy on lower time frames. I use the Fib Extension tool for profit targets, help alot.
A 1-2-3-4 reversal chart pattern is build up of 4 definable points, known as point 1, 2 , 3 and 4. A typical 1-2-3-4 chart pattern is best traded after a strong currency pair up - or downtrend and can be defined by an easy set of trading rules.
A trader can confirm the reversal trade using a technical indicator such as DMI or MACD. (or other ones)
1-2-3-4 Basic Rules for Short Trades
Point (1): The high in an up trending currency market.
Point (2): A downward correction in the up trend, the lowest bar in the correction before the price moves back up to point (3).
Point (3): The high in the move up from Point (2) but a failure to make a new higher high(Point 1).
Point (4): Go short 1 pip below point (2)
Daily chart of GBPAUD shows and example of a sell 1-2-3-4 Reversal Trading Strategy, with a 1: 5+ Risk Reward setup. 50 pip stop and 285 target.
This would have been a six day trade, but can use this same strategy on lower time frames. I use the Fib Extension tool for profit targets, help alot.
Penafian
Maklumat dan penerbitan adalah tidak dimaksudkan untuk menjadi, dan tidak membentuk, nasihat untuk kewangan, pelaburan, perdagangan dan jenis-jenis lain atau cadangan yang dibekalkan atau disahkan oleh TradingView. Baca dengan lebih lanjut di Terma Penggunaan.
Penafian
Maklumat dan penerbitan adalah tidak dimaksudkan untuk menjadi, dan tidak membentuk, nasihat untuk kewangan, pelaburan, perdagangan dan jenis-jenis lain atau cadangan yang dibekalkan atau disahkan oleh TradingView. Baca dengan lebih lanjut di Terma Penggunaan.