Price Action Pattern Series- 1-2-3 Trend Change Method !

Starting this series with a very reliable structure-based reversal technique. The 1-2-3 method helps identify when a trend has actually changed instead of guessing bottoms or tops.

In simple terms, the trend shifts only after three structural events complete:

Sharing a simple but powerful reversal method for anyone who follows pure price structure. This technique removes the guessing part during trend shifts and keeps everything rule-based.

The method works in three steps:

Step 1: Draw a trendline from the most recent extreme high to the recent extreme low in a downtrend. The first sign of strength is when price closes above that line. This only shows the momentum is changing, not the trend.

Step 2: After the break, price usually pulls back and retests the previous low area. The retest can be slightly lower or slightly higher, but the important part is that it rejects and pushes back up, forming a higher low.

Step 3: The trend flips only when price closes above the swing high formed between the trendline break and the retest. That’s where the structure officially shifts and the market enters a new leg.

Where this method works best (timeframes)
– 15m to 1H: Perfect for intraday traders. It shows early trend shifts but with enough confirmation to avoid traps.
– 4H: Ideal for swing traders. Gives a clean, reliable trend change without noise.
– Daily: Best for bigger structural shifts. Useful for long-term direction changes and macro reversals.
– Weekly: Works, but slow. Only for big cycle traders.

When to use it
– When the market is coming out of a strong trend and you want confirmation before entering the opposite direction.
– After a large spike or news move when you want the structure to settle.
– During consolidation phases where direction is unclear.
– When you want to filter out false bottom/fake breakouts.
– When liquidity sweeps the low and you want to see if real demand steps in.

Why this method is reliable
It forces the market to:

Break momentum

Retest and hold

Break structure

Only after all three happen, the trend officially changes. It reduces emotional entries and keeps you aligned with clean structure.

This method is built on classic price-action principles seen. Sharing it purely for educational purpose as part of the price action series. More patterns will follow. Trade safe !!