› The 123 strategy

The 123 strategy

As we already know, following market trends is the most substantial way to earn profits from the binary
options market. If you have read our previous articles, in which we recommended plenty of effective
trending strategies, you must have found a suitable system for your own trading style. Today, to continue
the trend-sticking series, we would like to introduce another trending strategy based on the basic principles
of price action, called “one-two- three”.

Introduction

In every bullish or bearish trend, there are always periods that prices pull back after a long movement.
Knowing how to benefit from these occasions will make you a lot of money, and that’s why this “one-two-
three” system is developed. Based on Market Performance theory, the technique, with only three manually
defined points presenting specific market patterns, will show you exactly when the risk-trend momentum is
weakening, which suggests for a potential resumption of the grand trend. Trading the primary trend, or
literally, following the market maker’s steps will guarantee a stable income.

Like every other price action system, this strategy is very simple and doesn’t require any additional indicator
to be combined with. However, it still generates highly reliable signals. Having been watchfully checked by
us for a year, this technical system has so far affirmed a win-rate of about 82%.

How to use the system to trade binary options

This system could be applied in all time frames and all currency pairs. However, we suggest using it on the
1-hour chart or higher.

The steps to define a bullish signal are as follows:
  1. In an uptrend, determine the lowest point of the retracement, label it “the first point” or “1”.
  2. Define the newest formed lower high, label it “the second point” or “2”.
  3. The third point (3) is spotted when a swing low which is higher than the first point develops.
  4. Given prices turning above the second point, a bullish signal is confirmed. You can enter the market
    with a buying position around the second point.

The 123 strategy


Conversely, the steps to identify a bearish trading opportunity are as follows:
  1. In a downtrend, determine the highest peak of the rally, label it “the first point” or “1”.
  2. Identify the newest developed higher low, label it “the second point” or “2”.
  3. The third point (3) is defined when a swing top which is lower than the first point forms.
  4. Once prices penetrate below the second point, a bearish occasion is affirmed. Let’s open a selling
    order near the second point.

The 123 strategy


Please remember to wait for the candlestick to be fully closed before making any trading decision.

The expiry time should be set 8 times larger than the period of the chart you trade on. For example, you can
set the finishing time to be 8 hours when trading on the 1-hour chart.

Pros and cons of the “one-two- three” system

Pros
  • Easy-to- use, all-purpose.
  • Generating highly accurate signals by taking advantage of market momentum.
  • No additional indicator required.
Cons
  • Necessitating traders to keep their eyes on the trading platform.
  • Requiring a high level of patience.
Conclusion

This “one-two- three” has shown itself as a very effective technical system, enabling traders to follow market
driver’s steps. We believe that sticking to this strategy can help profit substantially from binary options
trading. Anyhow, please remember to combine the strategy with fund controlling and psychology managing
methods, the indispensable tools of every trader, to minimize the risk and maximize the profit.


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