Forex trading strategy #4-a (1-2-3, RSI + MACD)

Thank you, Lino.

Cheers,
Edward

Hi Edward

I look at the hourly chart first to see what direction im looking to trade.

Having a look at GBP/JPY hourly chart you can clearly see its in a downtrend reversing up to pivot point.

Then i look at the 15min chart and wait for a 1-2-3 setup. I dont mind if the pair trades above the rainbow MMAs, im trading off the hourly trend!

As you can see it made a reversal twice at the pivot point level. The first trade had a slight higher high, thats also ok, and the second trade had no fractal at point 3, also look how the pairs candles made higher lows to point 3. One trades the break of the previous candles low.

Hope that answers your question Edward.

Cheers Lino

Good and simple one, thank you, Lino.

So, basically we can just use fractals, and whenever a fractal forms on RainbowMMA, we enter a trade in the direction of a trend.
... Or do you still look for a higher low in a downtrend prior to considering a fractal at point 3 for entries?
Thank you!

I'm attaching an indicator too:
RainbowMMA.mq4

Keep it up!
Best regards,

Edward

Hi Edward

I have changed my strategy slightly and thought it might be of interest.

I had a look at urban towers strategy, its a very good add on to the 1-2-3 setup. Im using fractals and the rainbow MMA custom indicator on mt4, i also added pivot points as a guidance to where support and resistance could come into play.

We take the original 1-2-3 setup, using fractals as a guidance also helps. Once we have a touch of the rainbow MMAs and our points 3, confirmed by yet another fractal we place a short entry just below the low of previous candle.

In my original 123 setup, i went for a 1 to 1 return, this way one gets a much higher risk/reward ratio using same profit targets.

Hope it helps, cheers Lino

Hi Paul,

by default every trading platform calculates EMA based on Close price.
In MT4 platform in particular, a trader can choose to calculate EMA in different ways: applied to close, open, high or low.
If a trading platform doesn't provide those additional options for setting EMA, then all calculations are applied to Close by default.

For manual calculations, please look for formulas online.

Regards,
Edward

Edward-

How do you calculate an EMA on the CLOSE ???

Paul

Hi George

I personally would not use it, i still stick to entering just under/above point 2.

Having said that, have a look at the same example i gave Walter, you could easily have used a bars low, but its still down by point 2.

I keep it close to point 2 so that if the price does not reach point 2 it could reverse and make a new 1-2-3, thats if the EMAs also crossed again.

Hope the answers your question

Cheers Lino

Hi Walter

Yes, from point 3 the wave down as in the example should not be shorter than from point 1 to point 2.

I have a target the same distance from point 2 to point 3, where i have a green horizontal line.

Hope that answers your question.

Cheers Lino

Lino and Edward -

Hey Lino, please refer to your comment on March 10 at 06:12 re Floor

Trader method with 1-2-3 point 3 .

I agree that the F.T. # 13 , BASIC rules ( about the size and shape of the price bars ) , CAN be used to get an earlier entry , just above Point 3.

But , would YOU use the F.T. 's MA's of 9 and 18 , or are you still experimenting with different Moving Averages ?

George F.

Hi Lino, you mentioned on page 2, "since Wave 3 should not be shorter than wave one,". What does that mean? Can illustrate?

Looks a lot like Joe Ross's Hook method .

Jim

Yahoo , Joe Ross Hook method . Scroll down to Appendix A and get 62 pages including the Hook . Another version of 1-2-3

Phil

Hi Paul

There is NO holey grail system out there, one must find a strategy that you feel comfortable with.

Cheers
Lino

dance :)

Hello Edward and Lino----

Just when I became convinced that NOTHING could beat 1-2-3 along comes the Pip Milking strategy which is even simpler ,( zero indicators ) and , it gets you in the trade EARLIER at the same point that Gartley does , WITHOUT all those pesky calculations .

Now what ??????? What are you fellows gonna do ??

Paul