The pattern is designed and used by a famous trader.
The pattern identifies markets which are breaking out of consolidation.
The pattern can be used on all instruments. Cooper has a preference for stocks.
The pattern is easy to understand.
The pattern provides only buy signals.
The signals are filtered efficiently by a combination of the ADX and the DMI.
The historic results of the signals looks attractive.
Jeff Cooper started trading in 1981, first for a hedge fund and later for his own account. He lost a significant amount of money during the 1987 market crash. Having learned his lessons from the crash, he only designs strategies which are largely independent of the movement of the overall market.In 1996, Jeff Cooper published his most successful book: “Hit & Run Trading: The Short-Term Stock Traders Bible”. During the internet bubble, Jeff Cooper became an icon for many traders.
Jeff Cooper’s philosophy is based on “price action”. The evolution and the dynamics of the market price are key to him. Indicators are only filters. The assets on his watch list include, in particular, stocks at new highs, stocks breaking out of consolidations, and stocks with attractive levels of volatility. In short, he mainly watches dynamic stocks which are likely to continue to move big time.
The 1-2-3-4 chart pattern
Traders look for this chart pattern on 1-day chart. For a 1-2-3-4 chart pattern to occur there must be at least 3 subsequent lower lows in parallel with at least 3 subsequent lower highs. A position is bought when the market price trades above the high of the last candlestick in the pattern.
in addition to his high and low price criteria Jeff Cooper also defined criteria for the average directional indicator (ADX) and the directional movement indicator (DMI). These criteria filter the signals. The criteria are automatically taken into account by the NanoTrader platform when indicating a valid 1-2-3-4 signal.
Trading examples
Thisexampleshows a 1-2-3-4 pattern detected by the NanoTrader. A buy signal (green chart background) appears when the market trades above the high of the last candlestick in the pattern.
Thisexampleshows a 1-2-3-4 pattern detected by the NanoTrader. There is no buy signal because the market did not trade above the high of the last candlestick in the pattern.
Conclusions
The NanoTrader is capable of detecting Jeff Cooper's 1-2-3-4 chart pattern. The pattern can be used in screeners, signals and strategies.
A chart pattern or price pattern is a pattern within a chart when prices are graphed. In stock and commodity markets trading, chart pattern studies play a large role during technical analysis.
on 1-day chart. For a 1-2-3-4 chart pattern to occur there must be at least 3 subsequent lower lows in parallel with at least 3 subsequent lower highs. A position is bought when the market price trades above the high of the last candlestick in the pattern.
Head and Shoulders Pattern: The head and shoulders pattern is considered one of the most reliable chart patterns and is used to identify possible trend reversals.
The classical approach to pattern 1-2-3 involves opening short positions at the break of the correctional low. The buyers who seriously expect the upward trend to be restored are most likely to have set their stop orders there. Their avalanche triggering allows you to see a sharp downward movement in the chart.
TradingView is the best website for stock charts. The free version gives you access to a wide array of indicators, drawing tools, and different visualization options for your stock chart.
It consists of three price swings with three swing points, suggesting a change in market direction. Trading the 123 pattern involves entry at the breakout of point 2, stop loss placement below (for bullish setup) or above (for bearish setup) point 3, and setting a profit target by measuring the pattern itself.
The most commonly used chart patterns are Head and Shoulder Patterns, Double Top & Double Bottom Patterns, Triple Top & Triple Bottom Patterns, Rounding Bottom Pattern, Wedge Pattern, Pennant or Flag Patterns, Ascending & Descending Triangle Patterns and in their own category Candlestick Patterns.
Which is one of the most accurate trading indicators? The most accurate for trading is the Relative Strength Index. It is considered one of the best momentum indicators for intraday trading. It helps investors identify the shares which are bought and sold in the market.
The 123 rule in forex trading refers to the price action pattern where the market makes a new high (or low), followed by a retracement, and then a higher high (or lower low).
The 5-3-1 strategy is especially helpful for new traders who may be overwhelmed by the dozens of currency pairs available and the 24-7 nature of the market. The numbers five, three, and one stand for: Five currency pairs to learn and trade. Three strategies to become an expert on and use with your trades.
The 2% rule is a risk management principle that advises investors to limit the amount of capital they risk on any single trade or investment to no more than 2% of their total trading capital. This means that if a trade goes against them, the maximum loss incurred would be 2% of their total trading capital.
The best overall TradingView alternative is eToro. Other similar apps like TradingView are MetaTrader 5, Binance Broker, E*Trade Web Platform, and Kite. TradingView alternatives can be found in Financial Analytics Software but may also be in Brokerage Trading Platforms or Investor Relationship Management Software.
The 123-chart pattern is a three-wave formation, where every move reaches a pivot point. This is where the name of the pattern comes from, the 1-2-3 pivot points. 123 pattern works in both directions. In the first case, a bullish trend turns into a bearish one.
The Higher the volumes, the higher the chances of a strong breakout. Time period: Traders are required to use a longer time period to determine a genuine trend. A general rule is to use a time period of 21 days to wait for the stock to show its momentum.
Trend trading strategy. This strategy describes when a trader uses technical analysis to define a trend, and only enters trades in the direction of the pre-determined trend. The above is a famous trading motto and one of the most accurate in the markets.
Candlestick charts are perhaps the most widely used among active traders. In some ways, candlestick charts blend the benefits of line and bar charts as they convey both time and impact value. Each candlestick represents a specific timeframe and displays opening, closing, high, and low prices.
A day trader could trade off of 15-minute charts, use 60-minute charts to define the primary trend and a five-minute chart (or even a tick chart) to define the short-term trend.
Introduction: My name is The Hon. Margery Christiansen, I am a bright, adorable, precious, inexpensive, gorgeous, comfortable, happy person who loves writing and wants to share my knowledge and understanding with you.
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