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Introduction to the Strat Patterns Trading 

Published by Ali Muhammad
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The Strat Trading is a trend trading system based on candlestick Strat patterns, three market scenarios, and timeframe continuity.
If you’re a trader, then you must have heard the famous phrase, “The trend is your friend.” This is true. We can only profit from the market if we follow the trend. If we go against the trend, we will always fail to make a profit.

The Strat Trading strategy provides traders with a rule-based trading system that both beginner and advanced traders can use to follow the trend in the market.
One important thing I want to tell you is that most traders lack confidence due to a lack of knowledge. That’s why they fail to follow a single system and keep skipping strategies. The Strat Trading system also helps traders because it’s a complete trading system and provides confidence to them.

History

The Strat Trading strategy was introduced by Rob Smith, a well-known Strat trader.
Rob Smith wanted to make things easier and simpler, so he created the Strat patterns strategy.

We can conduct overly complex analyses by learning chart patterns, indicators, and many other methods. To avoid this, Rob Smith showed that there are only three scenarios in the market—nothing else. He then used these three scenarios and created the Strat patterns, which he applied using the principles of timeframe continuity with excellent results.

According to him, price can only move in three possible ways:

  • Up/Down
  • Outward
  • Inward

The price can either make higher highs and lower lows (outward formation), move towards a single point (inward formation), or move up or down.
These are three universal scenarios, and they will never change.

After understanding these scenarios, he observed them in candlestick patterns to make them simpler and easier.
For example, the inward scenario can be seen in the inside bar candlestick pattern.

I will explain these scenarios in more detail in upcoming articles related to Strat patterns.

Importance

In trading, if you want to become successful, you should pick only a simple and logical trading system. Prediction is not the only thing required for trading; there is also risk management and trading psychology that a trader must learn.
If you start with a complex system, you will likely end up leaving trading. So, I highly recommend learning a simple trading method like Strat and mastering it thoroughly.

I have picked a few factors that also influenced me to learn the Strat patterns trading method:

Logical Trading System

The Strat trading method is based on natural market scenarios. These scenarios are universal truths and will continue to form on the chart forever. These scenarios will not change. This makes it a logical method for learning and forecasting. That’s why the Strat method is a logical trading system.

Trading Strategy Based on Logical Things

Rule-Based System

The Strat trading method has a complete set of rules that a trader must follow. From the three scenarios to the Strat strategy, the Strat method provides rules. It’s a mechanical system based on facts.

Rule Based Trading System

Multiple Timeframe Confluence

One of the most important aspects of the Strat patterns strategy is timeframe continuity, where a trader must align the higher timeframes with the lower timeframe to open trades in the direction of the higher timeframe trend.

Simplicity

The Strat strategy consists of simple market patterns. The Strat patterns are made of simple candlestick patterns, so it’s easy to learn, even for a beginner trader. It’s a user-friendly trading system.

Simple Trading Chart

High-Rewarding System

If a system has high risk and low reward, it might show higher wins in the short term, but sooner or later, it will fail. A good system always has high rewards and low risks. In the Strat strategy, we use low initial risk and scale the trades using real-time profits. That’s why it’s a high-rewarding trading system.

Low Risk & High Reward

These facts show that the Strat strategy is the perfect trading system to learn.
It becomes even easier to trade with the Strat using the advanced Strat tools we have developed. You can also check the Strat patterns indicator here.

Fundamental Principles

There are three major principles in the Strat trading strategy that we use to trade. Without these three principles, a trader cannot master the Strat trading strategy.

01 Timeframe Continuity

In trading, there is much less noise on higher timeframes, while there is too much market noise on lower timeframes. It is easier to predict true market trends on higher timeframes instead of lower ones. In the Strat strategy, we use higher timeframes to determine trends, either bullish or bearish, and then trade using Strat patterns on lower timeframes. That’s why timeframe continuity is the most fundamental principle of the Strat strategy.

Timeframe Continuity

02 Actionable Signals

After determining the trend using the timeframe continuity principle, we trade on lower timeframes using Strat actionable patterns. These patterns help us open a trade in the market with stop-loss and take-profit levels. We can predict future market moves using Strat actionable patterns.

Actionable Signals

03 Broadening Pattern

The most important principle of the Strat pattern strategy is the broadening formation or scenario 3 formation. This is the pattern that tells us where the market is heading or what the next price target is. By determining the next price target, we trade actionable signals until the price reaches that target. This helps minimize risk and increase rewards significantly.

Broadening Formation

These principles are the building blocks of the Strat methodology, and you should spend as much time as possible mastering them.

What Markets Can I Trade Using the Strat Strategy?

The Strat patterns are derived from candlesticks, and the Strat strategy is based on price action. It provides insights into what is happening behind the simple candlestick chart, making it applicable for trading in all the major markets of the world, including:

  • Stocks
  • Indices
  • Forex
  • Cryptocurrencies
  • ETFs
  • Commodities
markets that can be traded using thestrat patterns

The Strat patterns strategy was specifically designed for stocks, indices, and cryptocurrencies. So, if you are a stock trader or a crypto trader, I highly recommend choosing the Strat methodology.

The Bottom Line

To wrap this up, the Strat strategy will help you master market trading and become a successful trader. It is suitable for both part-time and full-time traders.

However, the key is to learn it thoroughly and accurately first. If you try trading the market without proper learning and practice, you obviously won’t achieve high results.

On ForexBee, I will continue uploading advanced and useful content related to Strat patterns. So, read those lessons and practice consistently to become a successful trader.

If you have any questions, don’t forget to comment below. I will do my best to answer all your questions.

Thanks!

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