TheStrat - A price action trading strategy you need to know about
What is TheStrat?
Very simply, TheStrat is a Price Action trading strategy developed by Rob Smith, that applies across all asset types from Forex to Bonds to Commodities and Stocks, and which provides specific guidance on entry and exit points.
It defines three key elements:
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Timeframe Continuity - We use Timeframe Continuity to ensure we are on the right side of the market.
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Broadening Formations - Broadening formations exist everywhere, and we can use these to determine the potential magnitude of future movements in price.
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Inside Bars - Inside bars are excellent for identifying consolidating price and breakouts.
Another key feature of TheStrat, is that of Full Timeframe Continuity, which is simply looking for the very strongest assets to trade, and trading them while strength remains. This is done using a multi-timeframe approach, checking price is either above or below the open on consecutive timeframes.
When trading, Targets are recent highs or low in price, while stops are kept very tight, typically using price structure on a lower timeframe. Having a tight stop does mean there are occasions when you get stopped out, but when you do, the losses are very small.
If you want to know more, check out the details here: www.thestrat-indicators.com/about
Happy Trading!
