A 1-2-3-4 reversal chart pattern is build up of 4 definable points, known as point 1, 2 , 3 and 4. A typical 1-2-3-4 chart pattern is best traded after a strong currency pair up - or downtrend and can be defined by an easy set of trading rules.
A trader can confirm the reversal trade using any technical indicator such as DMI or MACD (or others).
1-2-3-4 Basic Rules for Long Trades
Point (1): The low in a down trending currency market.
Point (2): An upward correction in the downtrend, the highest bar in the correction before the price falls back up point (3).
Point (3): The low in the move down from Point (2) but a failure to make a new lower low(Point 1).
Point (4): Go long 1 pip above point (2)
Noted daily EurUsd chart example has a 1: 3+ Risk Reward setup with a 30 pip stop and 100 pip target/profit. This would have happened within 6 days, yes this can be used on shorter time-frames, but I would not go lower then 15 minutes or 1 hour using this strategy.
I used the Fib Extension tool for profit areas when using this strategy to set targets. 127.20% extension target looks great for most profits, like this chart.