123 Pullback – Bearish

Developed at Definedge.

A 123 bearish pullback pattern is a method of identifying a pullback trade that occurs over 3 swing moves. It is a 5-column pattern.

1 – Double bottom sell signal pattern

2 – Column of ‘X’ crosses above double bottom sell pattern level

3 – Negative column reversal (Read pattern description)

It is a method to identify when the retracement crosses above the bearish breakout level and price again starts falling. After the double bottom sell pattern, there should be a minimum of eight boxes in order to ensure that it was not a weak breakout and that there was a meaningful fall following the bearish breakout. It offers a viable bearish pullback trading opportunity.

This pattern can be plotted on the chart by adding it from the study menu in TradePoint & RZone. The pattern is also available in the system builder section. By combining this pattern with other patterns and indicators, you can create your own trading strategies. For any group of stocks and market segments, you can scan and backtest stocks based on those strategies.