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,Stock,Commodity up - or downtrend and can be defined by an easy set of trading rules.
Timeframe : 15 Minute, higher
Pair: Stock, Currency, commodity
Chart: Candlesticks, Bar,OHLC
1-2-3-4 Basic Rules for Long Trade
Point (1): The Low in an Down trending market.
Point (2): A upward correction in the down trend, the highest bar in the correction before the price moves back down to point(3).
Point (3): The low in the move down from Point (2) but a failure to make a new lower low(Point 1).
Point (4): Go Long 1 pip value(0.05,0.10,0.15) above point (2)
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1-2-3-4 Long Trade Setup |
1-2-3-4 Basic Rules for Short Trades
Point (1): The high in an up trending 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 value(0.05,0.10,0.15) below point (2)
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1-2-3-4 Short Trade Setup |
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