1-2-3 Reversal

1-2-3 Reversal detects, numbers and manages the classic three-point trend-change setup directly on the chart — the definitive clean build of the 1-2-3 reversal. An objective swing rule pins points 1, 2 and 3, the point 2 trigger level extends right as a dashed line, the point 1 invalidation level as a dotted one, and event labels tag the bar that completes or kills each setup. One candidate is tracked at a time — bullish setups hunted after a decline, bearish after an advance.

How to Trade the 1-2-3 Reversal?

• Trigger level broken: a break of point 2 (close or wick, per the break rule) completes the pattern, prints a Trigger label, turns the dashed level solid and flips the tracked trend.
• Invalidation level hit: a fresh extreme beyond point 1 kills a formed candidate; with the keep option on, it fades to the invalidated color as a record.
• Stop placement: point 1 is full invalidation; the optional point 3 level shows the tighter placement that risks less but gets clipped by noise more often.

The build only starts counting once a trend worth reversing exists, filtering the endless candidates a sideways market prints. It slots in beside the other market structure tools reading the same pivots.

1-2-3 Reversal Settings

• Swing Length (default 5): bars on each side a high or low must dominate to confirm a pivot. Around 2 gives a Williams-fractal-style rule; larger values build slower structures.
• Point 2 Break Rule (default Close): Close demands a bar close beyond the trigger, filtering false pokes; Wick accepts any trade beyond it.
• Display toggles — Point Labels & Legs, Trigger & Invalidation Levels, Event Labels and Keep Invalidated Setups (all on) plus Point 3 Stop Level (off) — control what stays visible.

Frequently Asked Questions

How does the 1-2-3 Reversal compare to a Head and Shoulders?

A Head and Shoulders needs five pivots and a neckline, so it arrives later with more structure behind it. The 1-2-3 is the smallest tradable reversal unit — three pivots and a trigger — earlier and more frequent at the cost of more failures.

Do the drawings repaint?

A forming setup can adjust: point 2 may extend and point 3 may follow a deepening pullback, since pivots confirm Swing Length bars after their extreme. Trigger and invalidation events fire on closed bars against levels already drawn, and resolved setups freeze.

What alerts does this build include?

Six, in bullish and bearish pairs: Setup Formed when point 3 confirms short of point 1, Reversal Triggered when point 2 breaks, and Setup Invalidated when point 1 gives way first.