Zeiierman Trading » Indicators » Free Indicators » 1-2-3 Pattern Indicator

1-2-3 Pattern Indicator

Access it for free here!

Watch the video here! 

1-2-3 pattern indicator


The most basic and essential formation in the market is the 1-2-3 pattern. Almost every great move ever made in the market starts from this formation. 1-2-3 pattern initiates trends, establishes them, and occurs at significant highs and lows in the market. Every trader has used this pattern to detect a trend change without knowing they are using the 1-2-3 formation. 


This article will explain what a 1-2-3 pattern means and how to identify and take advantage of the pattern. In addition, we will shed light on our Free 1-2-3 Pattern (Expo) indicator that identifies the formation automatically and in real-time for you. 



The trend is your friend, so trade with it. This obvious fact is written in every book on technical analysis. However, all traders determined the trend differently, but there are some everyday patterns that most traders use. For example, the 1-2-3 Reversal Pattern is one of the most common ways of identifying trend changes and reading the trend direction. The 1-2-3 trend formation is so popular because it uses price actions. Hence all traders can identify it in any market and timeframe. However, although it’s the most common way, many traders have never heard of the 1-2-3 pattern. So, to simplify retailers’ trading, we at Zeiierman Trading decided to create the indicator 1-2-3 Pattern (Expo).

1-2-3 patterns

Identify the 1-2-3 Reversal Pattern

A new trend emerges from one or more countertrend patterns. Therefore, it’s super essential for traders to be able to identify these countertrend formations. One is called the “1-2-3 Pattern.” 


Bullish 1-2-3 pattern also called 1-2-3 low

A 1-2-3 low is characterized by a market reaching a significant low (number 1). The low is set once the price makes a major move away from the low (number 2). A correction immediately follows this as the market moves back toward the significant low and creates a higher low (number 3). If the price continues up from this point and breaks the high (number 2), the reversal pattern is confirmed, and a new bullish trend is likely to be established. 

Bullish reversal pattern

Bearish 1-2-3 pattern also called 1-2-3 high

A 1-2-3 high is the exact opposite of a 1-2-3 low. When there are no more buyers in the market, the price has a hard time making a new high. The bulls are sensing that the upward move is over. They begin to liquidate their long positions and take profits. A significant high is created (number 1). The bears are looking for a short opportunity that pushes down the price even further. The price makes a move away from the high (number 2) is created. This is followed by a retracement back up toward the significant high, and a lower high is made (number 3). If the price continues down from this point and breaks the low (number 3), the reversal pattern is confirmed, and a new bearish trend is likely to be established. 

Bearish reversal pattern

Same pattern, different name

The formation is also identified as a failure to break a new high or low. Some traders might recognize the 1-2-3 pattern as a Higher high going to a Higher low followed by a Lower high, also called HH/HL/LH. This is a sign that the trend might change toward negative. Conversely, identifying a bullish trend, traders are looking for a Lower low to a Lower high followed by a Higher low (LL/LH/HL). 

failure to break a new high or low

How to use

The 1-2-3 pattern is used to identify and find trend reversals. The pattern shows that a significant trend is coming to an end, and a new one has formed. 

Bullish Entry

The traditional way to enter a trade with the 1-2-3 low is to enter a long position when the price breaks above the correction high (point 2). Then, stop loss is set slightly below the lower high (point 3). 

Bullish 1-2-3 pattern entry

Bearish Entry

The traditional way to enter a trade with the 1-2-3 high is to enter a short position when the price breaks below the correction low (point 2). Then, the stop loss is set slightly above the lower high (point 3). 

Bearish 1-2-3 pattern entry

Stoploss placement

Since the 1-2-3 pattern is a trend reversal, we expect a new trend to be established. To clarify, if the current market trend is bullish and a 1-2-3 pattern is formed, we expect the trend to reverse bearish. Hence we want the price to go down and not break up for a higher high. Therefore the stop loss placement would be slightly above point 3.


Target & Exit

We recommend using a profit factor of two or higher to have proper risk management. Since this is a trend strategy, we assume a great move. Therefore we should take that into account when determining our target. 

Previous levels of support/resistance can be excellent areas for taking partials profit or exiting your trade. If you want to ride the trend until it ends, you can set trailing stops to follow the price. We have developed take-profit indicators that help traders identify great areas to take a profit. 

Reversal Target

How to use the 1-2-3 Reversal Pattern (Expo) Indicator

The indicator makes it easy for traders to find the 1-2-3 Reversal Pattern automatically. The 1-2-3 Reversal Pattern (Expo) Indicator analyses the price action data for you and displays the pattern in real time. With the inbuilt alert feature, the 1-2-3 Reversal Pattern (Expo) Indicator sends a notification when the pattern has been found! It can’t be much easier to catch the next big move. 


Indicator Features

  • Select the pivot period that identifies highs and lows. A low-value returns short-term price moves. A high value returns long-term price moves. 
  • Set shapes and colors for the 1-2-3 reversal formation. 
  • Display HH/HL/LL/LH pivots points.
  • The user can also set alerts and get notified when the pattern is confirmed.


Subscribe to our membership


Access the 1-2-3 Pattern Indicator on TradingView


“Boost” the script and add it to your Favorites and you will be able to access the script for free! WOW! Please leave a comment if you like it!

More Indicators

Machine Learning Momentum Index (MLMI)

Machine Learning Momentum Index (MLMI)

Machine Learning Momentum Index Indicator The Machine Learning Momentum Index (MLMI) represents the next step in oscillator trading. By blending traditional momentum analysis with machine learning, MLMI delivers a potent and dynamic tool that aligns with the...

Candles In Row

Candles In Row

Candles in Row Indicator The Candles In Row (Expo) indicator is a powerful tool designed to track and visualize sequences of consecutive candlesticks in a price chart. Whether you're looking to gauge momentum or determine the prevailing trend, this indicator...

AI Trend Navigator

AI Trend Navigator

AI Trend Navigator In the evolving landscape of trading and investment, the demand for sophisticated and reliable tools is ever-growing. The AI Trend Navigator is an indicator designed to meet this demand, providing valuable insights into market trends and potential...

Price & Volume Profile

Price & Volume Profile

Price and Volume Profile Indicator The Price & Volume Profile provides a holistic perspective on market dynamics by simultaneously tracking price action and trading volume across a range of price levels. So it is not only a volume-based indicator but also a...

Volume Orderbook

Volume Orderbook

Volume Order Book Indicator The Volume Orderbook indicator is a volume analysis tool that visually resembles an order book. It's used for displaying trading volume data in a way that may be easier to interpret or more intuitive for certain traders, especially those...

Relative Trend Index

Relative Trend Index

Relative Trend Index Indicator The Relative Trend Index (RTI) developed by Zeiierman is an innovative technical analysis tool designed to measure the strength and direction of the market trend. Unlike some traditional indicators, the RTI boasts a distinctive ability...

Trend & Pullback Toolkit

Trend & Pullback Toolkit

Trend and Pullback Toolkit The Trend & Pullback Trading Toolkit is an all-encompassing suite of tools designed for serious traders who want a comprehensive trend approach. It empowers traders to align their strategies with prevailing market trends,...

Market Structure and Price Action Toolkit

Market Structure and Price Action Toolkit

Market Structure and Price Action Toolkit This comprehensive Market Structure and Price Action toolkit integrates pioneering price action concepts, including fractal-based market structure, grid-price action system, retail and institutional levels/zones, liquidity...

Oscillator Toolkit

Oscillator Toolkit

Oscialltor Toolkit The Oscillators Toolkit stands at the forefront of technical trading tools, offering a comprehensive suite of sophisticated, adaptive, and unique oscillators. This toolkit has been thoughtfully designed to cater to all trading styles,...

Buy & Sell Toolkit

Buy & Sell Toolkit

Buy and Sell Toolkit The Buy/Sell Toolkit is a comprehensive trading tool designed to provide a holistic approach to trading. It brings together essential trading indicators and features in one place, simplifying the trading process and offering valuable insights...