The 123 pattern Forex Indicator is a powerful technical analysis tool traders use to identify potential reversal points in the financial markets. The 123 pattern indicator is a powerful tool that automatically identifies the 1-2-3 pattern on the chart, and it is able to monitor the formation of the pattern in real time.
This indicator is helpful for traders looking to profit from trend reversals in any instrument, such as currency pairs, stock market, gold, etc. The indicator is simple and easy to use, and it displays points 1, 2, and 3 on the chart. Additionally, it has the ability to determine the possible levels of profit-taking, such as Fibonacci levels or Fibo extension, and it also features “Awesome Profit Zones” which have a high probability of execution.
It also generates audio and text messages when a pattern is formed and features sending email messages and push notifications to mobile devices.
This 123 Pattern finder Indicator can be used on any Forex currency pair and other assets such as commodities, Cryptos, Binary Options, Stock markets, Indices, etc. You can also use it on any time frame that suits you best, from the 1-minutes to the Month charts.
What is 123 Pattern
The 123 patterns is a chart pattern used in technical analysis to identify potential reversal points in the financial markets. It is a three-point pattern composed of a
- Point 1 – High
- Point 2 – Lower intermediate
- Point 3 – Higher high
The pattern is considered complete when point 3 is higher than point 1 and point 2 is in between point 1 and point 3.
- A bullish 123 pattern is formed when the price trends downward and point 2 is a local low. This pattern is considered a bullish reversal pattern.
- A bearish 123 pattern is formed when the price is trending upward and point 2 is a local high, and this pattern is considered a bearish reversal pattern.
How it used in Forex Trading
In forex trading, the 123 patterns are used as a technical analysis tool to identify potential reversal points in currency pairs. Traders use this pattern to identify potential buying and selling opportunities by looking for a bullish 123 pattern when the currency pair is trending downward and a bearish 123 pattern when the currency pair is trending upward.
When a bullish 123 pattern is identified, traders may interpret this as a signal to buy the currency pair, as it may indicate that the trend is reversing from bearish to bullish. Similarly, when a bearish 123 pattern is identified, traders may interpret this as a signal to sell the currency pair, as it may indicate that the trend is reversing from bullish to bearish.
Traders can also use the 123 patterns to set stop-loss and take-profit levels. For example, if a bullish 123 pattern is identified, the trader may set their stop-loss level below the low of point 2 and take-profit level at point 3.
It’s worth noting that the 123 Pattern Finder Indicator is not a guaranteed indicator of a trend reversal, and it’s recommended to combine it with other technical analysis tools such as trend lines, chart patterns, Support resistance, and other indicators to make a more informed decision.
Features of 123 Pattern Indicator
- The 123 patterns can indicate either a reversal or a trend.
- The 123 pattern is effective on instruments and timeframes from M5 to MN.
- The greater the number of bars forming the pattern (from point 1 to point 3), the greater the price movement is predicted after breaking the pattern.
- If point 1 has a pin-bar (Hammer or Shooting Star in candlestick analysis), it strengthens the pattern.
- For Intraday trading, looking for the pattern only in the European and American sessions is recommended.
- According to the trading system, a pattern is considered to be triggered when a bar breaks the line at the level of point 2. The bar must close on the other side of the line and not simply touch or pierce it. However, the indicator can also consider a simple touch of the line from point 2 as pattern triggering (parameter “Method for pattern triggering”).
123 Pattern Finder Indicator Input Parameters
- Number of bars for the indicator calculation – the number of bars for the indicator calculation
- Depth of ZigZag – the number of bars to search for ZigZag peaks (analog of the Depth parameter of the standard ZigZag)
- Color to BUY / Color to SELL – the color of lines forming a buy/sell pattern
Parameters of profit levels
- Method for pattern triggering – choose method: “Touch of the line from point #2” or “Breakout of the line from point #2”
- Show “Awesome Profit Zones” – show profit-taking zones with a high probability of execution.
- Show the Fibo Levels – (Disabled – do not show; Current pattern only – show for the current pattern only; All patterns – show for all patterns in history )
- Method of calculating the Fibo Levels – method for calculation of Fibo levels (Fibo Levels; Fibo Extention)
- Profit target #1 (Fibo number) – Profit target #5 (=0 – disable) – Fibonacci number for calculating the target №1 – №5 (if =0, the line is not displayed)
- Style line of the Profit Levels – line style of profit levels
- Show points #1,2,3 – show/hide points
- Points size – choose the size
Notifications and sound
- Text of the Message – information about the pattern (Full – all levels; Short – only the price level of breakout line in point 2)
- ON/OFF – Sound when the signal – enable sound signals
- Signal of the line breakdown – pattern 123 is complete – the name of the sound file for line breakout – the 1-2-3 pattern completed.
- Pre-alarm – pattern 123 began to emerge – the name of the sound file played when a pattern starts to form.
- Alert / E-Mail / Push – messages in the terminal / E-mail / mobile devices
after using 2 days – best time frame 1 hr,
best pair – xauusd ,and usdchf
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