123 Pattern Day Trader

123 Pattern Day Trader is a Forex intraday Trading system that helps to identify the significant pivotal lows and pivotal highs where traders can do trade in favor of the trend with a big risk to reward ratio.

This system consists of three different indicators which help traders to identify and trade in the right direction of the market near support and resistance zones.

Let’s try to understand the working of this trading system

123 Pattern Day Trader Overview

Day signal ultra is a moving average-based indicator that helps to smooth out the price action data and identify the trend of the market.

123 Pattern Day Trader Overview

If the price is above this day signal ultra then the color of this ribbon will change into white and if the price is below the day signal ultra then the color of this indicator will turn red.

The slope of Day signal ultra is very important to identify the strength of the trend. If the price is above this indicator and the slope is upwards then only traders should look for long trades and if the price is below day signal ultra and slope of this indicator is down then traders should look for short trades.

123 Pattern Day Trader Explanation

123 Pattern Day Trader Explanation

Day look is another trend following indicator which plots the histogram above or below based on the difference between long-term and short-term moving averages.

If the histogram is below zero line then prices are in a downtrend and if the histogram is above the zero lines then the price is moving in an uptrend.

If the price is above the Day signal ultra Day look and Day Exp indicators are forming a red histogram then it means prices are in the pullback zone after an uptrend.

If the price is below the Day signal ultra Day look and Day Exp indicators are forming White histogram then it means prices are in pullback zone after Downtrend.

Support and resistance levels are used for taking entries in the trend. If this trading system generates a long signal and the price is trading near the support then traders should do long trades with stop loss below the support zone.

If a system-generated short signal and price is trading near the resistance then traders should execute the short trade with stop loss above resistance.

Also Read: Best Forex Brokers in South Africa

123 Pattern: Buy Conditions

123 Pattern Buy Parameters
  • Price should form a higher high and higher low.
  • Price should move above the Day signal ultra indicator.
  • The slope of the Day signal ultra should be rising.
  • Price should give pullback in uptrend and Day look and Day exp histogram should turn Red.
  • Buy signal near the support zone is signal for long entry.
  • Stop loss below the support zone.

123 Pattern: Sell conditions

123 Pattern Sell Parameters
  • Price should form lower high and lower low.
  • Price should move below the Day signal ultra indicator.
  • The slope of Day signal ultra should be falling.
  • Price should give pullback in downtrend and Day look and Day exp histogram should turn white.
  • Sell signal near the resistance zone is signal for long entry.
  • Stop loss above the resistance zone.

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I have been actively trading stocks and currencies since April 2012. Besides trading with my personal money I am a technical analyst in a mutual fund which has Rs. 1 billion in assets under management. At my leisure, I love attending live music, traveling, and partying with friends.

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