Price Action 1-2-3 method in the Market

In Price Action 1 2 3 method, traders will use this method to try and analyze forex price setups on the chart that might result in a price breakout in one direction. The Price Action 1-2-3 method will be used to analyze the likely direction that the price breakout will move towards.

Price action trading is a method that is used by traders to analyze forex chart price movement using only price action analysis.

What's Price Action Forex Trading Method? - Price action is the use of only price charts to trade Forex, without the use of technical indicators. When trading with this price action method, candlesticks charts are used. This strategy uses lines & pre-determined forex price patterns such as the 1-2-3 price pattern that either develops or series of candlestick bars.

Traders use this strategy because this analysis is very objective and allows the trader to analyze forex market moves based on what they see on the currency charts and market movement analysis alone.

This strategy is used by many traders: even those that use forex indicators also integrate some form of price action in their forex strategy.

The best use of this price action forex method is achieved when the signals generated are combined with line studies so as to provide extra confirmation. These line studies include forex trend lines, Fibonacci retracement zones, support and resistance levels.

Price Action 1-2-3 Breakout - Trading Forex Price Action 1-2-3 Method

This price action 1-2-3 method strategy uses Three chart points to determine the breakout direction of a forex currency pair. The 1-2-3 forex method uses a peak and a trough, these chart points forms point 1 & point 2, if market moves above the peak the signal is long - buy signal, if it moves below the trough the signal is to short - sell signal. The break out of point 1 or point 2 forms the third point of the price action 1-2-3 method.

Price Action 1-2-3 Breakout Forex Trading Strategy - Trading Forex Price Action 1-2-3 Method

Series of breakouts in 1-2-3 price action strategy

Series of Price Action Breakouts 1-2-3 Method Trading - Price Action 1-2-3 Breakout Forex Trading Strategy Method

Investors use forex price action strategy to try and predict where a price currency direction might go. The forex market is either trending or ranging.

A trending forex market moves in a specific direction while a ranging market moves sideways, normally after hitting a support or resistance level.

Observing the behavior of price action provides this data of whether the market is trending or ranging or reversing its direction.

As with any other Forex strategy this method should also be combined with other confirming forex indicators to avoid whipsaws. The 1-2-3 price action pattern can give good forex signals in a trending market but will give whipsaws when the market is ranging, it is best to determine if the market is trending or not before you start using this strategy.

Combining 1-2-3 Price Action Forex Strategy with other Indicators

Good forex indicators to combine forex price action method with are:

• RSI Indicator

• Moving Average Indicator

Investors and forex indicators should use these two indicators to confirm if the direction of price action breakout is in line with the trend direction shown by these 2 technical indicators. If the direction of the price action breakout is also the same as that of these indicators then investors & traders can open a trade in the direction of the signal. If not investors & traders should not open a trade as there is more likely a chance that this signal may be a whipsaw.

Just like any other indicator in Forex, price action also has whipsaws & there is a requirement to use this as a combination with other signals as opposed to just using this strategy alone.

Combining 1-2-3 Price Action Forex Strategy with other Indicators - RSI and Moving Average