The 1-2-3 formation anticipates a change in trend. This formation is identified as either a "Top" or "Bottom".

1-2-3 Top
The 1-2-3 Top formation anticipates a change in trend, from up to down, on a break below the number two point. This formation is easily identified because the number one point is the annual price high for the contract.

To Trade a 1-2-3 Top:
Place a SELL order on a break down past the #2 point. Then, place a stop loss order just above the #1 point (Considered to be an industry standard) or just above the #3 point (A more conservative stop loss placement.)
 

Example of a 1-2-3 Top in Track 'n Trade Pro:



1-2-3 Bottom
The 1-2-3 Bottom formation anticipates a change in trend from down to up on a break above the number two point. A 1-2-3 Bottom Formation is easily identified because the number one point is the annual price low.

To Trade a 1-2-3 Bottom Formation:
Place a BUY order just above the #2 point, and then place your stop loss order just below the #1 point (Considered an industry standard) or just below the #3 point (Considered a more conservative position.)

 

Example of a 1-2-3 Bottom in Track 'n Trade Pro:


1-2-3 Tool

Use the 1-2-3 Tool to chart both a 1-2-3 Top and Bottom formation.

Drawing a 1-2-3 Top/Bottom:
1. Select the 1-2-3 tool from the Charting Toolbar.
2. Position the mouse pointer where you would like to place the #1 point and left click to place.
3. Move to the #2 point and click to place.
4. Move to the #3 point and click to place.

Moving a 1-2-3 Drawing:
1. Select the 1-2-3 drawing by clicking on it.
2. Drag to the new location and release the mouse button to place. Note: The tool is selected when a line appears connecting the 1,2, and 3.

Deleting a 1-2-3 Drawing:
1. Select the 1-2-3 drawing by clicking on it and press the Del(Delete) Key on your keyboard.
2. Or, right-click the drawing and select "Delete" from the popup menu.

Resizing the 1-2-3 Drawing:
1. Select the 1-2-3 drawing by clicking on it. The drawing is selected when boxes appear on the corners.
2. Click on one of the boxes to drag the select point and release the mouse button.

Changing Properties of a 1-2-3 Drawing:
Right-click on the drawing to view the Properties menu. Properties that can be changed are:

Foreground - Changes the line and arc color of the 1-2-3.

Line Thickness - Changes the thickness of the 1-2-3 line. Choose values from 1-6.

Line Style - Changes the line style of the 1-2-3 line, which shows when the line is selected. Choose from Solid, Dashed, Dotted, and more.

Arc Thickness - Changes the arcs formed at the 1, 2, and 3 points. Choose values from 1-6.

Font - Changes the Font, Size, Style, and Color of the 1, 2, and 3.

Show Text - Select to view or hide the 1, 2, and 3.

Send to Back - Changes the layer of the tool. This option is used when more than one tool is in the same area of the chart. Click on Send to Back when you need to access a tool under the 1-2-3 drawing.