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123 Pattern Day Trader: Breakout Strategy for Forex Intraday Trading

Nov 23, 2020

The strategy 123 Pattern Day Trader is a profitable Forex breakout system based on Price Action 1-2-3 chart pattern and trend filtering.

Strategy parameters

  • Currency pairs: major pair with low spreads
  • Timeframe: M5 – M30
  • Trading time: any, do not trade during big news
  • Risk management: choose a lot size that the risk is no more than 2-5% of the deposit per trade

Indicators used

  • Day signal arrow
  • Day open line
  • Day signal ultra filter trend
  • Day bar (ADX 14 period and Parabolic SAR 0.2 -0.02)
  • Day look (12, 26, 9)
  • Day explosion multi-timeframe
  • 123 pattern V6

Setting up a price chart

  • Unpack the zip archive
  • Copy the template to the templates folder
  • Copy the indicators to the MQL4 folder -> Indicators
  • Restart the terminal
  • Open the chart of the required currency pair
  • Install a template named “123 Day Trader.tpl”

The correct price chart with a template should look like this:

123 Pattern Day Trader strategy

General rules of 123 Pattern Day Trader strategy

You need to enter the market only in the direction of the current trend:

  • Uptrend: the price is above the white dots of the Day signal ultra indicator
  • Downtrend: the price is below the red dots of the Day signal ultra indicator

Signals indicating the opening of a BUY position

  • 123 pattern V6 indicator drew up arrow
  • White dots on the Day signal ultra indicator
  • The Day look indicator shows a white bar
  • On the Day explosion indicator, the white bar is above the moving average
123 Pattern Day Trader strategy BUY example

Signals indicating the opening of a SELL position

  • 123 pattern V6 indicator drew down arrow
  • Red dots on the Day signal ultra indicator
  • The Day look indicator shows a red bar
  • On the Day explosion indicator, the red bar is above the moving average
123 Pattern Day Trader strategy SELL example

Placing stop loss and take profit orders

A stop loss order is placed 5-10 points above / below the signal bar;

Take profit order is set depending on the used currency pair and timeframe. The recommended values ​​are M5: 7-12 points, M15: 8-15 points, M30: 15-25 points.

Please note that the sizes of stop loss and take profit orders are indicative and may vary depending on the currency pair and timeframe. You may also use a trailing stop, but in this case, the profitability of the strategy may decrease.

Forex strategy 123 Pattern Day Trader has simple trading rules, so it should not be difficult even for beginner traders.

I would recommend not opening positions before, during and after the release of important macroeconomic news. Please also test the strategy on a demo account before using it on a real account.

In 123-pattern-day-trader.zip file you will find:

  • 123PatternsV6.ex4
  • 123PatternsV7 Alerts.ex4
  • Day_Bar.ex4
  • Day_Expl_D1.ex4
  • Day_Heiken_Ashi.ex4
  • Day_Look.ex4
  • Day_open_line.ex4
  • Day_signal_arrow.ex4
  • Day_signal_ultra.ex4
  • Readme.txt
  • 123 Day Trader.tpl

Download 123 Pattern Day Trader strategy files for free: