Learn TheStrat
TheStrat reads price with one question: what did this candle do to the one before it? There are only three possible answers — it stayed inside, it broke one side, or it broke both. Everything else is combinations.
Created by Rob Smith — his story below ↓
The three candle types
Stays entirely within the previous candle's range. The market is compressing and hasn't chosen a direction. Insides are where moves are BORN.
Breaks the previous candle's HIGH but not its low. One-sided conviction. Most trends are chains of 2s.
Breaks the previous candle's LOW but not its high. Same conviction, downside.
Takes out BOTH sides of the previous candle. Maximum volatility, both crowds trapped somewhere. Also known in the community as a mother bar.
Gray candle = the previous bar (the reference). Colored candle = the bar being typed. These are the same colors used on every chart on this site.
Shapes that sharpen any type: Hammer 🔨 and Shooter ☄️
These aren't separate categories — they're qualifiers on whatever type the candle already is. A hammer is a long LOWER wick with the close pinned near the high: sellers pushed down and got rejected. A shooter is the mirror — long UPPER wick, close near the low: buyers got rejected. A 2d that closes as a hammer is a very different animal than a plain 2d. On the pattern board they appear as 🔨/☄️ badges next to the ticker.
Test yourself
🎯 Type the candle
The gray bar came first. What did the second bar do to its range? Watch out: type is about the RANGE, not the color — red 2-ups exist.
The patterns on the board
A directional bar, an inside bar, then a break of the inside bar the OTHER way. The pause that flips the move. Break the inside bar the SAME way instead and it's a 2-1-2 continuation.
Inside bar, a 2 one way, then a 2 back the other way. The breakout out of compression FAILED — everyone who chased it is trapped, and their exits power the reversal.
Five or more consecutive higher lows (or lower highs) stacked in a row. When the streak breaks, those pivots unwind one by one — each stacked pivot is a target. Live alerts list the ladder.
Higher highs AND lower lows — the range is expanding like a megaphone. Rob Smith traded the edges: they're the magnets, and moves between them travel the full width.
A directional bar one way, then a directional bar the OTHER way. The first crowd is trapped; their exits fuel your move. The bread-and-butter Strat reversal.
Two 2-ups, a 2-down pullback, then the break back through the pullback bar's high. The dip got bought immediately — trend continuation with the pullback sellers as fuel. Mirror it for the bearish version.
Inside bar, then a break of its high. Compression releasing with direction. Enter on the break of the inside bar's range.
Two inside bars in a row. A tighter coil than a single inside — the breakout, when it comes, tends to travel further.
Inside bar, then an outside bar that swallows it whole. Compression exploded BOTH ways — breakout traders on each side are trapped, and the resolution out of that mess tends to be violent.
An outside bar followed by an inside bar. Violence, then silence. Both sides just fought to a stand-still; the break of the inside bar usually resolves it explosively.
Price breaks one side of the prior bar... and closes back the other way. Breakout traders are trapped at the extreme. Their unwinding is the trade.
An outside bar, a directional pullback, then the break back the OTHER way. The 3 cleared both books, the 2 leaned one way, and the reversal through that bar traps the leaners.
A directional bar breaking out of an outside bar. The strongest continuation in TheStrat — volatility resolved into direction.
How a live alert reads
Every break alert in the Discord carries the whole trade, named the way Rob Smith named it — the same inside bar is a 2-1-2 bullish reversal upward but a 2-1-2 bearish continuation downward, and the alert says which one you're looking at.
- 📐 Setup — the bar sequence that armed the trigger, plus hammer 🔨 / shooter ☄️ when the setup bar qualifies.
- ⚡ Why it fired — the exact level that broke and where price is trading, the minute it happens. Intraday breaks need a 1-minute CLOSE through the level; wick pokes don't fire.
- 🎯 Trade plan — entry at the break, stop at the setup bar's 50% line (the exact level where the Failed 2 alert fires), T1 at the measured move, with prior week/month levels as the bigger targets. Drawn on a chart that replies to every alert.
- 🧭 Confluence Check — full timeframe continuity scored against the break (FTFC 4/5 with this 2u). Intraday breaks fighting 3+ higher timeframes don't post at all.
- 🔫 PMG / 📢 Broadening — when the break unwinds a pivot ladder or lives inside an expanding range, the alert says so and lists the levels.
TTO — "Triangle They Out"
Rob Smith's term for the market's favorite trick: a stop-out run before the real move goes the other way. Everyone's stops cluster at the obvious spot (the amber line — under the recent lows here). Price drives INTO that shelf, flushes the stops out — "triangle they out" — and with the weak hands gone, reverses and runs the opposite direction.
The flush is fuel: stopped-out longs sold the low, and their re-entries chase the reversal higher. A Failed 2 is the one-bar version of this, and a hammer printing at the flush is your tell that the run took stops rather than started a trend. The lessons: don't park your stop where everyone else's is, and treat a violent break of an obvious level as a potential reversal, not confirmation.
Timeframe Continuity
The highest-conviction moments come when the Day, Week, Month, Quarter, and Year are all trading the same direction versus their opens. Every ticker page here shows the chips, and every live alert scores them against the trade:
Mixed chips mean timeframes are fighting. Many Strat traders simply wait until they agree — and the bot enforces it: intraday breaks under 3/5 alignment never post.
Speak the language
Rob-isms you'll see in the community (and on this site):
- #MindTheGap
- Rob's tag for tickers on the gapper list — gaps demand attention.
- Gapper list
- The morning list of gap-ups and gap-downs. Ours posts at 8:45 AM ET under Intel.
- Mother bar
- An outside (3) bar — it gave birth to both sides' pain.
- Full House for Harambe 🦍
- SPY, QQQ, DIA, and IWM all CLOSED an hour inside on the 60-minute, confirmed on completed candles. Market-wide compression — when the gorilla rings, a big move is loading. Watch the top strip.
- Triangle They Out (TTO)
- The stop-out run before the real move — see the section above.
- Actionable signal
- An entry defined by a level breaking, never by prediction.
The founder: Rob Smith
TheStrat was created by Rob Smith, a trader with over three decades in the markets whose career reached back to the open-outcry floor era. Watching order flow up close convinced him that price action could be read objectively — that every candle does exactly one of three things relative to the candle before it, and that everything else traders argue about is opinion layered on top.
He distilled that into the 1s, 2s, and 3s, timeframe continuity, and the idea of trading only actionable signals — entries defined by a level breaking, not by prediction. Just as importantly, he taught it openly and freely for years, building one of the most generous educational communities in retail trading.
Rob passed away in 2023. The community he built carries TheStrat forward, and pages like this one exist in that same spirit: the method, taught plainly, for anyone willing to learn it.
Go deeper
Put it to work
- Scan the Strat Patterns board for setups on your timeframe.
- Open the ticker, check the candle typing and continuity chips.
- Check ATR and how much of the day's range is already used before sizing.
- Star it to My Watchlist and track the setup.
Educational content, not financial advice. Patterns describe probabilities, not promises.