[Music] [Music] happy Saturday today I'm going to be going over the Strat uh pretty much just a general overview I won't go into too much detail into each and every single part since I don't want to have you guys here for five hours but essentially we're just going to go over you know what the Strat is um and the different components of it um like the candle combinations the scenarios broader informations time continuity what they are what they mean and how we can you know combine all of them in conjunction when we are trading the
Strat as always I am not a financial adviser this is not to be taken as Financial advice this is simply for educational purposes and with all that being said we'll get started um if I do pause for a little moments here and there I'm just looking at my screen to make sure I'm following all the points in my um other screen here that I have anyway so the Strat what is it the Strat is basically a uh trading strategy created by Rob Smith I believe he was a Floor Trader not sure for how long but
quite some time um it's pretty much just price action simplified so um with the Strat personally to me it was one of the best things that I've ever learned it's been about two years now since I've been using it and to this day still works exactly the same it's to me it's perfect it works with anything um since it is based on price action um um and you know whatever has candles you can use it on it um there are different instruments that it's more efficient on like for example um I mainly trade options with
it and regular stock or like Equity crypto as well but if I'm trading Futures I use a different method for that which I won't uh touch on today or can't really speak on anyway anywh who so with the strp like I mentioned was created by Rob Smith and to start off you may be looking at my chart and being like Desi what are all these numbers under your candles or above them so with the Strat there are three scenarios that Rob mentions and I'll zoom in so we can look at it a little cleaner so
we have a scenario one which if you are new to trading you may know that as an inside bar an inside bar stands for or a one bar stands for consolidation um you know there hasn't really been a direction where the market wants to go so so it's kind of just like um figuring out what it wants to do an inside bar pretty straightforward doesn't break the low does not break the high of the previous candle which the name gives it inside bar it's inside the previous bar or a one scenario scenario two it would
be a two bar either breaking the previous High being a two up or breaking the previous low which which will be a two down and then a scenario three would be breaking the previous High and the previous low of the previous bar so for example we have the scenario three right here broke the high and broke the low of the previous candle so we have our three and then a two up we have this candle here broke the previous high this will be a two up candle this one right here another two up because broke
only the high right here have a two down broke only the downside excuse me so of course those are the three scenarios what we also want to look for you'll hear this term called an actionable signal an actionable signal pretty straightforward is simply a hammer candle or a shooter candle which is you know a a hammer or reverse Hammer we have a shooter candle right here we have a hammer right here of course um you can you know this is a cleaner Hammer here with a green body and the body is a little bigger than
you know these examples here but actionable signals uh pretty much give you an indication if there's going to be a potential reversal so if there's a hammer or actionable signal on a downtrend more than likely it's going to reverse as we can see here price reversed down actionable signal price reversed up we have here an actionable signal to the downside a shooter a reverse hammer and then price reverse to the downside now it's pretty simple in the sense of what I love about the Strat the most is you know getting in what are our entries
what are our stop losses what are our targets with the Strat it makes it extremely simple and I'll zoom in so we can see some examples uh let's use let's go here so with the Strat in the with the different scenarios that we discussed earlier you can essentially um formulate a trading plan or a trade depending what you're looking to to take for example here let's pretend this candle and over does not exist and we only have these two candles right so here we have a 21 setup if it breaks the high of this Wick
we're going to go long if it breaks the low we're going to go short so our entry is going to be as soon as this candle breaks this high and something to note with the Strat we do not wait for candle closes as soon as it breaks that top of the wick you get into the trade your take profit is going to be the previous candle high so if we're going long and I enter here when this candle triggers me in I'm going to take profit well one of my targets will be right here Target
one and then of course you can look to the left this will be Target two even though they're close by and then of course you can use Target three as the next high of the candle and I'll show you another example uh let's [Music] use this right here so in this case here it did trigger short first it went two down and then the buyers brought it up and then made it a three up you can also see this as an engulfing an engulfing bar so as soon as it went three up again our entry
is above this Wick first Target this candle High second target this candle High third target this candle high and so on and so forth as you know price continues in your favor now something to keep in mind is uh let's see for stop losses there's two different areas where you can use your your stop loss and I'll go back to this example here with this 212 up for me I'm more of a tight stop- loss kind of guy so I like my stop loss to be under the trigger candle the trigger candle is the candle
that gets us into the trade that triggers us into the trade so this candle here once it trigger 212 up my stop loss is going to be right under this candle now some people may like to use the setup candle as their stop loss this one right here being the setup candle so if you take this 212 up you can put your stop loss down here or down here again for me personally I like putting my stop loss under this under the trigger candle not the setup candle and it is situational where sometimes I will
use the setup candle as the stop loss for example we have here this 312 up right so for me this 312 up this will probably be the only setup or a 212 up with a dogee or a hammer where I would use the setup candle as my stop loss instead of the trigger just to give it a little more room so moving on from candles and the different scenarios the next component of the Strat are broader formations now what are broader informations broader informations are essentially support and resistance for Strat users and uh let me
just bring this over and delete these that I drew prior so broader informations um generally when I'm looking for them I would draw them off of three candles since three candles on Lower time frames are broader informations I won't touch up too much on that today but I'll probably give a little example so for example like I mentioned broader informations being support and resistance for Strat users uh let me draw that there and then let me draw this here this is on the yearly chart so now let me go down to the weekly and oh
oops I have to actually bring this way back let's do Max available for the week and then let's uh zoom in here so as we can see with a broaden information that I drew on the yearly we can see how price is respecting this these levels so every time it gets to the top it comes down hits the bottom heads back up in this case here it rejected came back out and kept on trying to retest and break that level sellers kept on bringing it down went to the BF here came back up came down
bounced off again so you can see it's almost pinpoint accurate exactly why it's that accurate beats me I'm just here to trade I'm not I'm not the ones who are programming the market but anyway as we can see here um and I'll touch back on this later on when I combine everything but as we can see here we're brought our informations like I mentioned support and resistance we keep on trading in this range and then finally when it broke through that range it came back down to test it and kept on going higher except here
it broke through and you know so on and so forth anyway uh I'll touch up on this a little bit now and then I'll come back later on so with broader informations they can tell us where price wants to go and where it wants to head next for example once we rejected off this level and reversed down where's the next area that price wants to go price wants to come down and retest these uh these levels down here which it did came back down cool it it hit that level we printed an actionable signal a
hammer could have taken that 2 two up a 2 two reversal to the upside and then taking it back to the BF level back there or up there as your max Target of course you have your targets here with the previous candle highs and again once price came down here you had other actionable signals that you could have taken to the upside and again where does price want to go it wants to retest these levels here which it did so broad informations hopefully that makes sense again you know any questions that may come up for
you make sure to write them down as you go through this uh video and then you can ask me in the in the comments below so the next portion of the Strat would be time continuity time continuity uh is simply just giving us a a time frame of you know what are the what are the time frames doing what what are the time frames telling us so the way I understand it is when you're looking when you're analyzing a chart you always want to see you always want to do top- down analysis meaning you want
to start from the yearly time frame and then you want to go down um to the time frame that you potentially want to trade on so in the yearly for spy right now we can clearly see that we triggered two up so clearly price wants to go go even higher so the yearly is green we look at the monthly same thing two up green again go to the quarterly triggered two up we were green but looks like we're coming back so now the candle's red but still triggered two up go to the weekly weekly triggered
two up but ended red but overall you can see this um with not going too deep into the candles being closed and stuff like that but overall we're bullish looking at all the time frames so with time continuity preferably you want the trades that you take to be with time continuity meaning if the higher time frames are bullish you would want to be looking for a bullish or long type of setup if you take a short when most of the time frame are let's say green you run the risk of having a lower probability trade
and vice versa if most of the time frames are red and you want to go long you risk um you risk um getting caught on a low probability setup so let's say for example actually before I go into an example um one thing to note generally if I'm swing trading I'll look at the all the higher time frames if I'm day trading I'll really be paying attention to the 4our the daily and the weekly I don't really care too much about the monthly and higher but if they are in my favor even better so with
time continui aspect being mentioned let's say for example um you know let's go to the weekly clearly it's just been two up two up two up two up two up two up two up two up for since when since October of last year we reversed La uh last October literally been continuations this whole time we had a slight pullback a little tto which stands for triangle they out that's another Rob term which I won't go too much actually I won't really talk about in this video I'll probably make another video for it uh but essentially
we had pretty much is bullish now if you're on the one hour or let's say even the daily if you're trying to short these reversals you can clearly see every time they brought it down they the very next day they brought it up per se so we have this reversal here which it gap down continued up then we had a three down reversal only lasted for two days kept on going up so if you went short and you trying to hold it all the way down here you're going to get wrecked because the overall trend
is still bullish in moments like these if I'm going against a trend I would want to take my profit relatively quick in the sense of if I'm taking this short on the daily even though the overall time frames are bullish or the overall trend is bullish I'm going to still take my profit quick so for this 32 down setup it hit the first Target the next day uh or actually almost it was a few cents off but the third day it hit the target first Target here so that would have been a winning trade would
have taken my profit moved my stop to break even or slightly above and then as we can see here the next day you would have been messed up if you did not take profit there so let's let's go oh one thing to note uh just to wrap up really quickly when it comes to uh time frames what time frames do we take these trades on generally if you're starting off new uh Rob recommended um that you start off if you're going to be day trading on the higher time frames like the 1 hour even 4
Hour even the daily time frame to take trades off of me personally I prefer to take Tak trades when I'm day trading off the 1 hour the 4 Hour and the daily time frames when I'm getting into a day trade I only go to the five or 15 minute if I'm looking for a tto setup which again I'll speak on in another in another video uh but generally I'm only taking trades off the 1 Hour 4 hour and daily I'll say like 90% of the time I'm taking trades off the 4 Hour and the daily
the 1 hour will be if I miss the initial you know the initial entry or I want to take another setup if I'm swing trading I'm going to be looking at the daily the weekly and the monthly you can also look at the yearly if you want but um generally I just look at the daily weekly and the monthly for swings so uh that pretty much uh wraps it up for today I hope this G you gave you an understanding of the Strat um and you know makes it make a little more sense actually before
I end it I'm going to show one last thing when it comes to setups uh let me bring up the ebook really quickly when it comes to setups there's a ton of different setups as we can see here so really you want to um really hone in when you're starting off trading the Strat um Rob always recommends you know get like two or three setups that you want to practice with until you get a better understanding of it and then you can look into the other ones and add it to your Arsenal if you know
if that it helps if that helps you for me my go-tos are 21 setups 31 setups actionable signal setups uh there are also like a one one like a double inside or even triple inside which I show you guys an example really quickly let's go to Tesla also when you finish drawing your BR informations your chart will look will look crazy like this so something to note um if you're using trading view it's good and there's other videos that I've have there about drawing your BFS on trading view it's good to organize them so you
know which Broad informations they are some people like to draw their BFS in different colors for me that kind of overwhelms me which is a little ironic me saying it overwhelms me when I have all these things here but you know if you go to the like the lower time frames it's a little more relaxed only have two lines here but anyway um definitely make sure to label your BFS because when you start getting them all over the place you want to know which ones they are so for me on thinker swim I just uh
name it so I have here daily BF uh this one here is a weekly this one here is another daily so I kind of keep track of which ones are which since I only have them in in one color um anyway going back to the backtack inside bars when there's consecutive inside bars that means that there's a big move that's getting ready to play out and if there aren't any moves you know if there aren't any triggers that's it's okay cuz remember the more inside bars back to back there are the bigger the move is
going to be as we can see here with Tesla we had a triple inside bar once it broke the bottom they just murdered that thing that thing dropped uh what triggered at 19851 and then went uh 18683 so that's what that's about $12 in one day and it also had negative news to propel it to give it even more juice to die down again uh that's pretty much it last few tips take your time with it a lot of it can be a little confusing at first um if you are in a group or Discord
that I know you in or you know me in or even if you're just watching this and you you're not in any groups that I'm in um and you want the ebook that I presented earlier just let me know you know just send me a message or you know in the comments below let me know if you want it and I can send it to you hope this was helpful as always appreciate you guys for watching this um if you aren't a subscriber greatly greatly appreciate it if you do subscribe you know like like the
video all that other good stuff so other people can see this and get educated as always thank you for watching again and enjoy your weekend
