The 1-2-3 Reversal Entry and 2B False-Breakout Rules
Summary
The document presents two chart-based trading setups. In the 1-2-3 method, price breaks a prior trend line, retraces, and turns back in the opposite direction; a qualifying retracement must meet a stated fraction of the first move. The proposed entry follows the turn, with a stop beyond the third point and an add-on or profit-taking decision if price later clears the second point. It also specifies a minimum reward relative to risk and calculates an expected value using its claimed win rate and reward-to-risk ratio.
The 2B rule targets failed breakouts: after price moves beyond a prior high or low and then reverses back through that level, the trader enters in the opposite direction. The document proposes a stop near the entry level and a larger profit target, and gives a claimed win probability and expected-value calculation. These figures are assertions without supporting sample, market, or testing details. Both setups need validation across instruments and trading costs; chart interpretation and execution can change outcomes, so the stated probabilities do not establish reliable future performance.
Key ideas
- The 1-2-3 setup looks for a trend-line break, retracement, and renewed move in the reversal direction.
- Its entry and stop are defined around the third turning point, with a later breakout used for adding or taking profit.
- The 2B rule reverses position after a breakout fails and price crosses back through the prior level.
- The post calculates positive expectancy from claimed win rates and reward-to-risk ratios, without showing supporting tests.
- Both methods require independent validation and careful control of entry and exit execution.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.