Thread: Whats wrong with 123 Pattern

Hello Everybody,

I actually didn't need to start a thread, but since it goes, even if you do not ask questions, you dont get replies. And I wouldn't wish to leap to someone else's thread with an off-topic, therefore this new thread?

It is a simple question concerning the popular 123 pattern/system.

What is wrong with the system?

It is discussed in just about any introductory trading conversation and it is every where on the web , but I barely hear people speak about trading the system; particularly here at FF.

Is it that it isn't a profitable system? Or it is just too basic/simple for the experts to trade?

Personally, I tried this system a while back and it seemed to make sense but as usual, we always appear to believe the upcoming new system is far better than our current one(particularly after some reductions); This was how I gleaned out of it completely. Occasionally I wish to return to it, but I 've heard negative comments about it, and people saying you cannot count on it long term.

But over time, I have noticed that the pattern is always present on my charts, and could have helped me prevent bad trades and awarded me good entries for the profitable ones. But because of this (mis?) Conceptions ;I have deliberately refused taking it.

So I need to listen to what people have against (or for)this system.

When it has been discussed else where on FF, could someone kindly direct me to the thread.

I will post some charts to emphasize what I see.


N.B Pls constructive criticism only; afterall we are not arguing here, But only attempting to determine the good and the bad of the system for learners like us.

1 Attachment(s) Here is another chart.

Though they're chosen scenarios, but that is same with virtually every sytem, U do not get the perfect setup every day.

This is only PA
https://www.forexsoutheast.asia/cryp...iion-help.html

1 Attachment(s) I think this would have helped us avoid agonizing scenarios, where sometimes after entering a trade we begin doubting the rationale behind taking the place
https://www.forexsoutheast.asia/cryp...ed-orders.html

It's not a bad system. It's certainly incorrect. It's more of an intro than a professional system. It teaches you how you can think, but not always commerce.

Ideas like support and resistance are, in my own mind, an evolution of the 1-2-3 method. If you look at your charts for SR rather than 1-2-3, I visit a lot more successes where 1-2-3 has failed.

1-2-3 works in trending markets. . .SR functions in trending and ranging...

Originally Posted by ;

It is a simple question about the popular 123 pattern/system.

Because it's one of those functions in hindsight type systems. It looks good on a chart, however if you're taking a look at a 1 and a 2, you don't have any clue when or if a 3 will happen the way you think it will.

It's also far too discretionary, IMO, in the event that you put 10 traders in a room and had them pick out the patterns you'd probably get a different pair for every trader. Makes it a system puts far too much sense on things.

IMO the basic concepts tho are just basic SR and dow theory (higher lows( lower highs( whatever). From that you can find out the rest.

Originally Posted by ;

should you place 10 traders in an area and had them pick out the patterns you'd likely get a different place for every trader.

And then they end up getting into a fist fight.

Haha, wow, what traders groups would you attend?

Outlaw Foreign Exchange group. We are called the Hell's Traders. Born to go is our theme song. We recently had a run-in with a rival gang called the 50th Street Quants and defeat them all to inside a pip of the major support lines.

Anyhow, here's a pic of us flying through town on our choppers. The natives were in tears as they pointed and quivered in abject terror...I figure we must have had them scared out of the minds.

Originally Posted by ;

Because it's one of those functions in hindsight type systems. It looks good on a chart, but when you're looking at a 1 and a 2, you have no clue when or if a 3 will occur the way you think it will.

It's also far too discretionary,

Rabid, I really agree with U it operates in hindsight but I believe that is common with all systems; even the most prosperous ones( in trading, the rearview mirror is better than the windshield).

But I don't think that it's too discretionary, the measures are actually laid out.
A 1 is shaped, a two follows, U commerce if and only if a 3 is shaped. If a 3 is shaped, execute, otherwise, abort.

If we were convinced of when or how a 3 (or any other trading pattern) will occur, then I think we have discovered the holy grail. No body knows what the market will do next, we simply try to place ourselves egically and wait patiently for it to come to us instead of chasing it up and down.

Originally Posted by ;

It is not a terrible system. It is certainly not wrong. However, it's more of an intro than a professional system. It teaches you how to consider, but not commerce.

Ideas like support and resistance are all, in my mind, an evolution of the 1-2-3 method. When you examine your charts for SR rather than 1-2-3, I see a lot more successes where 1-2-3 has failed.

1-2-3 works in trending markets. . .SR functions in trending and ranging...

Yes, U are right, it gives us a bird's eyeview of the market and sometimes confirms if we are going the right way