The 123 pattern is mainly known as a reversal and breakout pattern. This is also the time when many will look to make their breakout trades. The 123 pattern is fully formed when price takes out the recent high of leg 1. This is followed by a retracement back lower that creates a higher low and movement 2. It can be used in both bullish and bearish markets to identify trend reversals or to trade potential breakouts.īelow is a chart showing an example of a bullish 123 pattern. The 123 pattern is formed with three price movements that create the 1,2 and 3 and is similar to the ABCD pattern. 123 Patterns V7 Metatrader 4 Forex Indicator by MT5 Traders.
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