This pattern is popular among the Pirce Action strategy traders, or more precisely, the 1-2-3 Pattern is a reversal signal distinguished by a zig-zag move at the end of a trend. This indicator automatically plots this pattern on the MetaTrader 4 chart (also available for MT5). Initially published on 28th September 2016 on the MQL5 market, the developer Pavel Zamoshnikov from Russia released a few updates at the request of users. It was updated with new functionalities and bug fixes finishing with version 3.5 from April 2019. Since the pattern is commonly sought-after, the tool received some popularity. The author has a large pool of released products consisting of 45 indicators, EAs, and signals.
The indicator is very specialized in what it does, but since the drawing of a pattern is subjective, this task is not easy to code and to give the right levels for drawing points 2 and 3. The base of the formula comes from the Zig Zag indicator that is adjusted through several conditional measures, some of which can be altered in the “Method for pattern triggering” parameter. The Overview page is clear, showing all that the indicator can handle. 1-2-3 pattern is drawn in real-time, and once it is completely formed an alert will be triggered, without any redrawing. A video presenting how the indicator work is great and short. These patterns can show on any trading instrument, be it in forex, equities, or crypto, while the indicator does not require manual setting adjustment for each.
If traders want to adjust the actual 1-2-3 numbers display, it can be easily done in the settings. Fibonacci levels are used in conjunction with the adjusted, non-repainting Zig Zag indicator, so the points are pinned to one of up to 5 Fibbonaci levels scanned by the indicator. These levels are also used to Stop Loss and Take Profit automatic placement and can be displayed with description if set so. A full alert component is used to signal the trader by email, push, or to a mobile device. If traders want a complete automatic solution, a new published Exper Advisor is containing the 1-2-3 pattern recognition from this indicator.
According to the author, the recommended timeframe is from M5 to monthly, although the greater the number of candles drawing the pattern the better and longer the trends are. However, it seems there are some limitations to useability. Intraday traders would need to focus on the EU and US trading sessions as the patterns are not reliable on other markets.
In the settings panel, you can adjust the number of candles for calculation, Zig Zag indicator depth, the method for pattern triggering (breakout from the 3rd point line or just touching), show Take Profit and Stop Loss levels and how they are calculated, some visual settings and how or when the alert will be triggered.
The Pattern 1 2 3 indicator can be bought for $30 with 10 activations without the option to rent it. A demo is offered in the separate link on the ‘Overview’ page. This price is relatively low comparing to other indicators doing the same or similar function but we have found some free versions elsewhere, just not exclusively made for the 1-2-3 pattern.
A total of 19 users gave this indicator a good rating of 4.6 stars and commenting often, showing high interest. This descriptive 3-star review shows not all are happy:
“After purchasing the indicator, I found a lot of problems. From a formal point of view, this is a good indicator. However, when used in practice, there will be too much noise, which is not practical. The formation of the trend is mainly after the completion of the 123 mode, that is, after breaking the 2 points horizontal line. If only 2 points of the horizontal line are needed. After the breakthrough, the market signal is stable and other signals are redundant. Any other signal warnings are noise. There are no such separate alert message reminder options set in the metrics. Your indication is that multiple message reminders appear with a switch and the sound is the same. This is not a very good difference, it is trouble…”
Just note there are only two reviews with a rating lower than 5 stars.
This Forex service can be found at the following web address: https://www.mql5.com/en/market/product/18523