The 1-2-3 setup technique in Forex has been around for an extended time and employed in the commodity exchange. Since then I even have seen traders victimization it on almost each market and once applied well, will provide surprisingly correct entry levels.
Lets 1st begin with the essential idea. throughout the course of any trend, either up or down, the market can kind very little peaks and valleys. see the chart below: This Forex commerce methodology is predicated on a similar study of process support and resistance levels and commerce upon the very fact of their violation. A commerce setup needs solely Associate in Nursing open chart and no restrictions for the currency or temporal order preferences.
Entry rules: Once value|the worth|the value} makes it through the “pivot Line” – dotted reference on the figure below (drawn victimization the most recent price peak) – and closes on top of (for uptrend) or below (for downtrend) the road buy/sell consequently. Exit rules: not set. However, exit may be found victimization Fibonacci method; or traders will live the space between purpose a pair of and purpose three and project it on the chart for exit. Additions: as an extra tool traders will use MACD (12, 26, 9). the foundations for entry then are next – let’s take a SELL order: once MACD lines cross downward, you explore for 1-2-3 set-up to make. once the value starts “attacking” the “pivot Line” you make sure MACD continues to be in SELL mode (two lines area unit heading down). Once the value closes below the “pivot Line” – place Sell order.