In technical analysis, patterns or shapes are referred to as repetitive data combinations. When displaying the price movement of bars or Japanese candlesticks on the chart you can see various figures that lead to a certain continuation. It is believed that if the figures are repeated, then the continuation is repeated. This trading system is based on the simplest pattern. It’s a “double top” with the second top below the first one. Accordingly, in the “double base” the second bottom is higher than the first one. These figures appear when the movement changes.It’s also called swinging trade. It can be used on any timeframe, with any market instrument and in any type of trading – from intraday to positionalThat’s what pattern 1-2-3 looks like. To see it on the chart, use the Zig-Zag indicator or a line instead of candlesticks. With a double top, if the price falls below level 2, it is a sell signal. Similarly, on a double basis, the price must rise above level 2An example of a sell signal using the Zig-Zag indicator. The price broke through level 2. When sold in this case, the Stop Loss should be set above level 1. Take Profit is recommended to be set to a stroke from level 1 to level 2. But this is not a mandatory condition, you can use other ways to get out of the deal.Example of a buy signal with the use of a broken line chart.This system can be used independently or in combination with other indicators to refine the input and output points.
01 Nov