Some traders equate trading to war. They see the act of trading similar to fighting and conquest… I don’t agree. War is disorganized, chaotic and violent. Trading, on the other hand, relies much more on rhythm and timing. To me trading is more like dancing, but not any dance. Trading is like the Waltz.
Why the waltz? Because in spite of the seemingly erratic movements the market makes, they are, in fact, not erratic at all. Market swings and reversals can be characterized by a simple, yet extremely powerful formation: the 1-2-3 formation. And like the waltz, the simple three steps of the 1-2-3 formation give you a way to “dance” with the markets. But don’t let the simplicity of this signal fool you – it is a very powerful indicator of market intention and an indispensable aid in finding trending markets and improving the timing of your trades.
A 1-2-3 formation (as known as the ABC pattern) occurs when the market makes a new high or low. This is the 1 point. From here prices retrace away from the 1 point until they reverse again, this time forming the 2 point. The 3 point occurs when the market attempts to retrace back to, but does not exceed, the 1 point. Once the 3 point is formed the formation is complete. BUY and SELL signals are generated when prices trade past the 2 point; however more aggressive traders can also take trades off the 3 point. In addition, the 1-2-3 pattern will repeat during the market trend allowing you to enter and re-enter off each new signal.
What makes the 1-2-3 pattern so powerful is that it builds upon the market’s struggle with support and resistance. The 1-2-3 pattern is a simple visual aid to let you see if the Bulls or Bears are in control of the market allowing you to BUY or SELL accordingly. The 1-2-3 formation is most often used as a reversal pattern but can be easily adapted to be an effective continuation pattern, so even if you miss the initial reversal signal you still have time to get into the trade off the next continuation signal.
The beauty of the 1-2-3 formation is that it is universal. It works in all markets and all time frames and is a favorite signal for professional swing traders and scalpers alike. Indicator Warehouse has developed the One Two Three Wave Counter indicator to highlight 1-2-3 formations as they occur on your NinjaTrader charts.
Unlike other reversal pattern indicators, the Ninja Trader One Two Three Wave Counter will Alert You to 1-2-3 patterns As They Form. The indicator is fully customizable and allows you to set parameters to filter out weaker signals as well as setting audio alerts to notify you when the signal completes. So if you’re interested in capturing more trending trades, or improving your timing on your entries, consider the Ninja-Trader One Two Three Wave Counter and get ready to dance with the markets, not fight them.
TESTIMONIAL DISCLOSURE: Testimonials appearing on www.IndicatorWarehouse.com may not be representative of the experience of other clients or customers and is not a guarantee of future performance or success.
LIVE TRADE ROOM DISCLOSURE: All presentations, videos, and information are for educational purposes only and the opinions expressed are those of the presenter only. All trades presented should be considered hypothetical and should not be expected to be replicated in a live trading account.
Commodity Futures Trading Commission Futures and Options trading has substantial potential rewards, but also significant potential risk. You must be aware of the risks and be willing to accept them to invest in the futures and options markets. Don’t trade with money you can’t afford to lose. This website is neither a solicitation nor an offer to Buy/Sell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this website. The past performance of any trading system or methodology is not necessarily indicative of future results.
CFTC RULE 4.41 – HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS, IN GENERAL, ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.
Use of any of this information is entirely at your own risk, for which Indicator Warehouse will not be liable. Neither we nor any third parties provide any warranty or guarantee as to the accuracy, timeliness, performance, completeness or suitability of the information and content found or offered in the material for any particular purpose. You acknowledge that such information and materials may contain inaccuracies or errors and we expressly exclude liability for any such inaccuracies or errors to the fullest extent permitted by law. All information exists for nothing other than entertainment and general educational purposes. We are not registered trading advisors.