Description:
The world of trading is constantly evolving, and traders are always on the lookout for new strategies to help them navigate the markets. One such strategy that has gained popularity in recent years is #TheStrat. #TheStrat is a unique trading approach that combines technical analysis, market psychology, and risk management to help traders make informed decisions and maximize their profits.
Bar Scenarios:
- Inside Bar (1): An inside bar is a bar that is within the range of the previous bar. In other words, the bar’s high is lower than the previous bar’s high and the bar’s low is higher than the previous bar’s low. Inside bars occur during periods of consolidation or equilibrium of buying and selling. You can get chopped up trading inside bars.
- Directional Bar (2): A directional bar is a bar that broke out of the range of the previous bar in one direction, including gaps. In other words, the bar either has a higher high and higher low or a lower high and lower low than the previous bar. A directional bar is referred to as an UP or a DOWN depending on its high or low price relative to the previous bars high or low.
- Outside Bar (3): An outside bar is a bar that broke out of the range of the previous bar in both directions. In other words, the bar has both a higher high and a lower low than the previous bar. It is important to note that Scenario 3 can only occur after Scenario 2 occurs first. It also often occurs after Scenario 1 because the range of Scenario 1 is relatively small. Scenario 3 is essentially a broadening formation in a lower timeframe. When you look at it like this, broadening formations are not as rare as some technical analysis books would have you believe. This scenario helps you gauge magnitude. It also tells you that both the buyers and sellers are aggressive, potentially leading to wilder moves.
The Strat Features:
- The ability to scan or be alerted to specific patterns using Multi-Factor Alerts and the Market Scanner.
- Having the capability to use our Smart Checklist feature to identify Time Frame Continuity.
- The ability to use Broadening Formation chart patterns. These can also be used to identify setups in real-time with our Market Scanner.
- Having the capability to set Price Alerts so you are able to be alerted when the price hits your target happen in real-time.
- By using our automatic Candlestick Pattern Detection, we can highlight various patterns on your chart.
- Creating custom indicators using theStrat, including our new FTFC Indicator. You can import it into your account by clicking here.
Use Case:
- Identify Longer-Term Trend: The trader starts by analyzing the longer-term charts, such as the daily or weekly charts, to identify the overall trend of the market.
- Check Timeframe Continuity: The trader then checks for timeframe continuity by analyzing the shorter-term charts, such as the 1-hour or 15-minute charts, to ensure that they are in line with the longer-term trend. If there is a lack of continuity between the different timeframes, it can indicate a potential change in the market trend or a period of consolidation.
- Entry/Exit points: Once the overall trend has been identified and timeframe continuity has been confirmed, the trader looks for areas where the short-term trend is in line with the longer-term trend. This can help identify potential entry and exit points for trades.
Do you want to learn more? Check out our Learning Center Article.