Price Action–1-2-3 Trade system
This strategy is a very simple and logical strategy used throughout the trading world. The Price Action 123 Spread betting Trade System takes a new trade when prices fail to make new highs or new lows. The Spread betting example below is set on a 4HR chart but this can be used on any time frame. I have also pictured this strategy on the EURUSD. This is my favourite pair and the forex spreadbetting pair I specialize in.
There are no indicators, it is all price action. This is considered a reversal strategy.
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Summary
Time frame: 4HR
Tag: EURUSD
Indicators used : None
Type: Price Action
Timeframe of trade: Swing
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Entry Rules:
Entry occurs after a trend has been underway for sometime, and prices have reached extreme levels. These levels will no longer be sustainable, and prices will fail to make new lows or new highs.
Below is a spread betting example of the Price Action–1-2-3 spread betting system.
Spread-betting short:
This is opposite to the above entry signal; instead prices have reached new highs and fail to move higher, interrupting the up trend.
A) 123 – Lower High
After prices have been making new highs and higher Lows, the new highs are not sustainable anymore and the highs make a lower high (3). Here the bears have overpowered the bulls and it is time to trade short unless you a conservative trader that you wait for prices to bear point (2).
B) 123- Double top.
Similar to the above scenario, you will instead have prices form a double top at the highs, fail to break the highs and move lower. Here is your entry signal, or, again if you are a less aggressive trader wait for the prices to break point 2.
Spread-betting long:
There are two buy scenarios:
A) 123 – Higher Low
This scenario is when prices have been falling making Lower Lows and Lower Highs. At the end of the downtrend the low does not make a new low, but makes a higher low. Now you can spreadbet long when prices fail to make a new low. A less aggressive trader will wait for the prices to move higher past point 2 then he buys.
B) 123- Double Bottom
In this scenario, at the end of the downtrend the low does not make a new low, but makes a double bottom, not breaking into new lows. This is a signal to trade long. A less aggressive trader will wait for the prices to move higher past point 2 then trade long.
Exit Rules:
Exit the trade either at target profit or when the opposite signal occurs, that is when the trend fails to continue and new highs or lows fail. Use your money management rules
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