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THE STRAT
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NO GUARANTEE OF ANY KIND IS IMPLIED OR
POSSIBLE WHERE PROJECTIONS OF FUTURE
CONDITIONS REGARDING SECURITIES ARE
ATTEMPTED. 2
T H E S T R A T
MODULES
(1) WHAT IS THE STRAT? 5
(2) CANDLESTICK FORMATION & NUMBERS 7
(3) STRAT COMBOS 11
TABLE OF
(4) ENTRIES AND EXITS 32
(5) STOP LOSSES 36
(6) TTO 39
WHAT IS THE
STRAT
MODULE 1
INTRODUCTION
M W M
4
WHAT IS THE STRAT?
ROB SMITH; FORMER FLOOR PRICE ACTION AND TIME FRAME COMPREHENSIVE CANDLESTICK TRADING FOR NEWCOMERS AND
TRADER WITH 20+ YEARS OF ANALYSIS. PLAY WITH THE TREND, COMBINATIONS FOR TRADE ENTRY, EXPERIENCED TRADERS ALIKE
EXPERIENCE NOT AGAINST IT EXIT, AND STOP LOSS
5
WHY USE THE STRAT?
OVER TRADITIONAL TECHNICAL ANALYSIS
COMPREHENSIVE CONSISTENT
VERSATILE PROFITABLE
CANDLESTICK
MODULE FORMATION AND 2
NUMBERS
M W M
7
CANDLESTICK FORMATION
HIGH
CLOSE
BULLISH CANDLE
CANDLESTICK
• PRICE IS MOVING UP
ANATOMY BODY
• PRICE CLOSED HIGHER
THAN IT OPENED
OPEN
LOW
CANDLESTICK FORMATION IS EASY TO LEARN YET A
CRUCIAL CONCEPT TO GRASP. TRADERS MUST
UNDERSTAND THE ANATOMY OF A CANDLESTICK TO HIGH
CLOSE OPEN
BODY BODY
OPEN CLOSE
LOW LOW LOW LOW
LOW LOW
9
STRAT CANDLE NUMBERS
CONSOLIDATION
• FAILS TO BREAK THE HIGH • BREAKS THE HIGH OR • BREAKS THE HIGH AND
OR LOW OF THE LOW OF THE PREVIOUS
CANDLE
LOW OF THE PREVIOUS DIRECTION
PREVIOUS CANDLE CANDLE
RANGE EXPANSION
or
10
STRAT
COMBOS
MODULE 3
M W M
11
STRAT COMBOS
OPTIMAL CANDLESTICK COMBINATIONS TO ENSURE HIGH PROBABILITY TRADES.
OUR FAVORITES 12
CONTINUATION WHAT IS A
REVERSAL?
OCCURS WHEN PRICE MOVES IN THE
OPPOSITE DIRECTION IT PREVIOUS TREND
BULLISH CONTINUATION BEARISH CONTINUATION
WHAT IS A
CONTINUATION?
OCCURS WHEN PRICE CONTINUES IN THE
SAME DIRECTION AS PREVIOUS TREND REVERSAL
13
2-2 BULLISH ✓ 2-2 BULLISH CONTINUATION
CONTINUATION
2-2 BEARISH CONTINUATION
2-2 BULLISH REVERSAL
2-2 BEARISH REVERSAL
3-2-2 BULLISH REVERSAL
3-2-2 BEARISH REVERSAL
2-1-2 BULLISH CONTINUATION
2-1-2 BEARISH CONTINUATION
IDENTIFYING
2-1-2 BULLISH REVERSAL
• A DIRECTIONAL BAR (2) UP
2-1-2 BEARISH REVERSAL
FOLLOWED BY
• A DIRECTIONAL BAR (2) UP
3-1-2 BULLISH CONTINUATION
ENTRY 3-1-2 BEARISH CONTINUATION
3-1-2 BULLISH REVERSAL
3-1-2 BEARISH REVERSAL
1-2-2 BULLISH REVERSAL STRAT
1-2-2 BEARISH REVERSAL STRAT
STRENGTH/WEAKNESS
1-3 BULLISH REVERSAL STRAT
+ GREAT FOR CONTINUATION PLAYS
1-3 BEARISH REVERSAL STRAT
+ STAYING IN PLAYS
+ ENTER CURRENT TREND
+ EASY TO RECOGNIZE
- CAN LEAD TO FAKE OUTS MORE OFTEN THAN OTHER COMBOS
14
2-2 BEARISH 2-2 BULLISH CONTINUATION
CONTINUATION
✓ 2-2 BEARISH CONTINUATION
2-2 BULLISH REVERSAL
2-2 BEARISH REVERSAL
3-2-2 BULLISH REVERSAL
3-2-2 BEARISH REVERSAL
2-1-2 BULLISH CONTINUATION
2-1-2 BEARISH CONTINUATION
IDENTIFYING
2-1-2 BULLISH REVERSAL
• A DIRECTIONAL BAR (2) DOWN
2-1-2 BEARISH REVERSAL
FOLLOWED BY
• A DIRECTIONAL BAR (2) DOWN
3-1-2 BULLISH CONTINUATION
3-1-2 BEARISH CONTINUATION
3-1-2 BULLISH REVERSAL
3-1-2 BEARISH REVERSAL
1-2-2 BULLISH REVERSAL STRAT
1-2-2 BEARISH REVERSAL STRAT
STRENGTH/WEAKNESS ENTRY
1-3 BULLISH REVERSAL STRAT
+ GREAT FOR CONTINUATION PLAYS
1-3 BEARISH REVERSAL STRAT
+ STAYING IN PLAYS
+ ENTER CURRENT TREND
+ EASY TO RECOGNIZE
- CAN LEAD TO FAKE OUTS MORE OFTEN THAN OTHER COMBOS
15
2-2 BULLISH 2-2 BULLISH CONTINUATION
REVERSAL
2-2 BEARISH CONTINUATION
16
2-2 BEARISH 2-2 BULLISH CONTINUATION
REVERSAL
2-2 BEARISH CONTINUATION
2-2 BULLISH REVERSAL
17
3-2-2 BULLISH 2-2 BULLISH CONTINUATION
REVERSAL
2-2 BEARISH CONTINUATION
2-2 BULLISH REVERSAL
2-2 BEARISH REVERSAL
18
3-2-2 BEARISH 2-2 BULLISH CONTINUATION
REVERSAL
2-2 BEARISH CONTINUATION
2-2 BULLISH REVERSAL
2-2 BEARISH REVERSAL
3-2-2 BULLISH REVERSAL
19
2-1-2 BULLISH 2-2 BULLISH CONTINUATION
CONTINUATION
2-2 BEARISH CONTINUATION
2-2 BULLISH REVERSAL
2-2 BEARISH REVERSAL
3-2-2 BULLISH REVERSAL
3-2-2 BEARISH REVERSAL
20
2-1-2 BEARISH 2-2 BULLISH CONTINUATION
CONTINUATION
2-2 BEARISH CONTINUATION
2-2 BULLISH REVERSAL
2-2 BEARISH REVERSAL
3-2-2 BULLISH REVERSAL
3-2-2 BEARISH REVERSAL
2-1-2 BULLISH CONTINUATION
21
2-1-2 BULLISH 2-2 BULLISH CONTINUATION
REVERSAL
2-2 BEARISH CONTINUATION
2-2 BULLISH REVERSAL
2-2 BEARISH REVERSAL
3-2-2 BULLISH REVERSAL
3-2-2 BEARISH REVERSAL
2-1-2 BULLISH CONTINUATION
2-1-2 BEARISH CONTINUATION
IDENTIFYING
• A DIRECTIONAL BAR (2) DOWN
✓ 2-1-2 BULLISH REVERSAL
2-1-2 BEARISH REVERSAL
FOLLOWED BY
AN INSIDE BAR (1)
3-1-2 BULLISH CONTINUATION
• ENTRY
FOLLOWED BY 3-1-2 BEARISH CONTINUATION
• A DIRECTIONAL BAR (2) UP 3-1-2 BULLISH REVERSAL
3-1-2 BEARISH REVERSAL
1-2-2 BULLISH REVERSAL STRAT
1-2-2 BEARISH REVERSAL STRAT
STRENGTH/WEAKNESS
1-3 BULLISH REVERSAL STRAT
+ OFFERS LARGE MAGNITUDE TO FIRST TARGET
1-3 BEARISH REVERSAL STRAT
+ ENTER AT BEGINNING OF MOVE
+ ENTER AFTER CONSOLIDATION NOT DURING
- RISK OF TURNING INTO AN OUTSIDE BAR (3)
22
2-1-2 BEARISH 2-2 BULLISH CONTINUATION
REVERSAL
2-2 BEARISH CONTINUATION
2-2 BULLISH REVERSAL
2-2 BEARISH REVERSAL
3-2-2 BULLISH REVERSAL
3-2-2 BEARISH REVERSAL
2-1-2 BULLISH CONTINUATION
2-1-2 BEARISH CONTINUATION
IDENTIFYING
2-1-2 BULLISH REVERSAL
• A DIRECTIONAL BAR (2) UP
FOLLOWED BY ✓ 2-1-2 BEARISH REVERSAL
23
3-1-2 BULLISH 2-2 BULLISH CONTINUATION
CONTINUATION
2-2 BEARISH CONTINUATION
2-2 BULLISH REVERSAL
2-2 BEARISH REVERSAL
3-2-2 BULLISH REVERSAL
3-2-2 BEARISH REVERSAL
2-1-2 BULLISH CONTINUATION
2-1-2 BEARISH CONTINUATION
IDENTIFYING
2-1-2 BULLISH REVERSAL
• AN OUTSIDE BAR (3) UP
2-1-2 BEARISH REVERSAL
FOLLOWED BY
• AN INSIDE BAR (1) ✓ 3-1-2 BULLISH CONTINUATION
24
3-1-2 BEARISH 2-2 BULLISH CONTINUATION
CONTINUATION
2-2 BEARISH CONTINUATION
2-2 BULLISH REVERSAL
2-2 BEARISH REVERSAL
3-2-2 BULLISH REVERSAL
3-2-2 BEARISH REVERSAL
2-1-2 BULLISH CONTINUATION
2-1-2 BEARISH CONTINUATION
IDENTIFYING
2-1-2 BULLISH REVERSAL
• AN OUTSIDE BAR (3) DOWN
2-1-2 BEARISH REVERSAL
FOLLOWED BY
• AN INSIDE BAR (1)
3-1-2 BULLISH CONTINUATION
25
3-1-2 BULLISH 2-2 BULLISH CONTINUATION
REVERSAL
2-2 BEARISH CONTINUATION
2-2 BULLISH REVERSAL
2-2 BEARISH REVERSAL
3-2-2 BULLISH REVERSAL
3-2-2 BEARISH REVERSAL
2-1-2 BULLISH CONTINUATION
2-1-2 BEARISH CONTINUATION
IDENTIFYING
2-1-2 BULLISH REVERSAL
• AN OUTSIDE BAR (3) DOWN
2-1-2 BEARISH REVERSAL
FOLLOWED BY
AN INSIDE BAR (1)
3-1-2 BULLISH CONTINUATION
• ENTRY
FOLLOWED BY 3-1-2 BEARISH CONTINUATION
• A DIRECTIONAL BAR (2) UP ✓ 3-1-2 BULLISH REVERSAL
3-1-2 BEARISH REVERSAL
1-2-2 BULLISH REVERSAL STRAT
1-2-2 BEARISH REVERSAL STRAT
STRENGTH/WEAKNESS
1-3 BULLISH REVERSAL STRAT
+ OFFERS LARGE MAGNITUDE TO FIRST TARGET
1-3 BEARISH REVERSAL STRAT
+ ENTER AT BEGINNING OF MOVE
+ IF RANGE OF OUTSIDE BAR (3) IS CLEARED, OFFERS A
CONTINUATION PLAY
- RISK OF TURNING INTO AN OUTSIDE BAR (3)
26
3-1-2 BEARISH 2-2 BULLISH CONTINUATION
REVERSAL
2-2 BEARISH CONTINUATION
2-2 BULLISH REVERSAL
2-2 BEARISH REVERSAL
3-2-2 BULLISH REVERSAL
3-2-2 BEARISH REVERSAL
2-1-2 BULLISH CONTINUATION
2-1-2 BEARISH CONTINUATION
IDENTIFYING
2-1-2 BULLISH REVERSAL
• AN OUTSIDE BAR (3) UP
2-1-2 BEARISH REVERSAL
FOLLOWED BY
• AN INSIDE BAR (1)
3-1-2 BULLISH CONTINUATION
ENTRY
FOLLOWED BY 3-1-2 BEARISH CONTINUATION
• A DIRECTIONAL BAR (2) DOWN 3-1-2 BULLISH REVERSAL
27
1-2-2 BULLISH 2-2 BULLISH CONTINUATION
REVERSAL STRAT
2-2 BEARISH CONTINUATION
2-2 BULLISH REVERSAL
2-2 BEARISH REVERSAL
3-2-2 BULLISH REVERSAL
3-2-2 BEARISH REVERSAL
2-1-2 BULLISH CONTINUATION
2-1-2 BEARISH CONTINUATION
IDENTIFYING
2-1-2 BULLISH REVERSAL
• AN INSIDE BAR (1)
2-1-2 BEARISH REVERSAL
FOLLOWED BY
• A DIRECTIONAL BAR (2) DOWN
3-1-2 BULLISH CONTINUATION
28
1-2-2 BEARISH 2-2 BULLISH CONTINUATION
REVERSAL STRAT
2-2 BEARISH CONTINUATION
2-2 BULLISH REVERSAL
2-2 BEARISH REVERSAL
3-2-2 BULLISH REVERSAL
3-2-2 BEARISH REVERSAL
2-1-2 BULLISH CONTINUATION
2-1-2 BEARISH CONTINUATION
IDENTIFYING
2-1-2 BULLISH REVERSAL
• AN INSIDE BAR (1)
2-1-2 BEARISH REVERSAL
FOLLOWED BY
• A DIRECTIONAL BAR (2) UP
3-1-2 BULLISH CONTINUATION
29
1-3 BULLISH 2-2 BULLISH CONTINUATION
REVERSAL STRAT
2-2 BEARISH CONTINUATION
2-2 BULLISH REVERSAL
2-2 BEARISH REVERSAL
3-2-2 BULLISH REVERSAL
3-2-2 BEARISH REVERSAL
2-1-2 BULLISH CONTINUATION
2-1-2 BEARISH CONTINUATION
IDENTIFYING
2-1-2 BULLISH REVERSAL
• AN INSIDE BAR (1)
2-1-2 BEARISH REVERSAL
FOLLOWED BY
• A DIRECTIONAL BAR (2) DOWN WHICH FAILED AND
3-1-2 BULLISH CONTINUATION
REVERSED, BREAKING THE OTHER SIDE OF THE INSIDE BAR (1) 3-1-2 BEARISH CONTINUATION
RESULTING IN AN OUTSIDE BAR (3) 3-1-2 BULLISH REVERSAL
3-1-2 BEARISH REVERSAL
1-2-2 BULLISH REVERSAL STRAT
1-2-2 BEARISH REVERSAL STRAT
STRENGTH/WEAKNESS
+ PLAY OFF FAILED DIRECTIONAL BAR POST CONSOLIDATION
ENTRY
✓ 1-3 BULLISH REVERSAL STRAT
1-3 BEARISH REVERSAL STRAT
RESULTING IN EARLY TREND ENTRY
- ENTERING DURING RANGE EXPANSION, PRICE CAN REVERSE
30
1-3 BEARISH 2-2 BULLISH CONTINUATION
REVERSAL STRAT
2-2 BEARISH CONTINUATION
2-2 BULLISH REVERSAL
2-2 BEARISH REVERSAL
3-2-2 BULLISH REVERSAL
3-2-2 BEARISH REVERSAL
2-1-2 BULLISH CONTINUATION
2-1-2 BEARISH CONTINUATION
IDENTIFYING
2-1-2 BULLISH REVERSAL
• AN INSIDE BAR (1)
2-1-2 BEARISH REVERSAL
FOLLOWED BY
• A DIRECTIONAL BAR (2) UP WHICH FAILED AND REVERSED,
3-1-2 BULLISH CONTINUATION
BREAKING THE OTHER SIDE OF THE INSIDE BAR (1) 3-1-2 BEARISH CONTINUATION
ENTRY
RESULTING IN AN OUTSIDE BAR (3) 3-1-2 BULLISH REVERSAL
3-1-2 BEARISH REVERSAL
1-2-2 BULLISH REVERSAL STRAT
1-2-2 BEARISH REVERSAL STRAT
STRENGTH/WEAKNESS
1-3 BULLISH REVERSAL STRAT
+ PLAY OFF FAILED DIRECTIONAL BAR POST CONSOLIDATION
RESULTING IN EARLY TREND ENTRY
✓ 1-3 BEARISH REVERSAL STRAT
31
T H E S T R A T
ENTRIES
AND EXITS
MODULE 4
M W M
32
ENTRIES TIME FRAME CONTINUITY
ACTIONABLE CANDLESTICK
COMBINATIONS
PREVIOUS CANDLESTICK
HIGHS OR LOWS ARE USED
AS PRICE TARGETS.
SCALE
34
EXITS
TARGET 2
TARGET 1
ENTRY
35
T H E S T R A T
STOP
LOSSES
MODULE 5
M W M
36
STOP LOSS RESPECT STOP LOSSES TO
MINIMIZE MASSIVE LOSS
SHARES
STOP
UNDERLYING’S PRICE
STOP
37
STOP LOSS RESPECT STOP LOSSES TO
MINIMIZE MASSIVE LOSS
OPTIONS
STOP
UNDERLYING AND
GREEKS
ENTRY
STOP
38
T H E S T R A T
MODULE TTO 6
M W M
39
TRIANGLE THEY OUT
TOOK OUT
TAKE OUT HIGHS PREVIOUS HIGHS
TAKE OUT LOWS
FIND ENTRY
40
T H E S T R A T
TIME FRAME
ANALYSIS
MODULE 7
M W M
41
FULL TIME FRAME ANALYSIS
DAY TRADING
WEEKLY CANDLE
KNOW WHAT THE
LARGER TIME FRAMES
ARE DOING.
DAILY CANDLE
WHEN ENTERING A DAY TRADE OR SCALP,
MONITOR THE TIME FRAMES ABOVE TO
WHAT IS FULL TIME ENSURE THERE IS NO CONFLICTION
4 HOUR
1 HOUR FRAME CONTINUITY? BETWEEN HIGHER TIME FRAMES.
CANDLE
42
FULL TIME FRAME ANALYSIS
SWING TRADING
QUARTERLY CANDLE
KNOW WHAT THE
LARGER TIME FRAMES
ARE DOING.
MONTHLY CANDLE
WHEN ENTERING A SWING, MONITOR THE
TIME FRAMES ABOVE TO ENSURE THERE IS
WHAT IS FULL TIME NO CONFLICTION BETWEEN HIGHER TIME
WEEKLY CANDLE FRAME CONTINUITY? FRAMES.
43
T H E S T R A T
M W M
44
TIME FLIP
TABLE SHOWING THE FLIP = NEW CANDLE FORMS
TIME 5 MINUTE
CANDLE
15 MINUTE
CANDLE
30 MINUTE
CANDLE
1 HOUR
CANDLE
9:30
9:35
KNOW WHEN 9:40
THE NEXT
9:45
CANDLE STARTS
9:50
9:55
TIME FLIP IS WHEN A NEW CANDLE ON THE GIVEN TIME
PERIOD FORMS 10:00
10:05
10:10
10:15
10:20
10:25
10:30 45
T H E S T R A T
MODULE INTRADAY 9
STRATEGY
M W M
46
INTRADAY 5 MINUTE :
STRATEGY ENTRY
30 MINUTE : CHECK
47
T H E S T R A T
MODULE SWING 10
STRATEGY
M W M
48
SWING DAILY :
STRATEGY ENTRY
WEEKLY : CHECK
DAILY WEEKLY
MONTHLY QUARTERLY
QUARTERLY :
CHECK
USE MONTHLY TO CONFIRM OPTIONAL. FOR FULL TIME
TREND FRAME CONTINUITY
49
T H E S T R A T
BROADENING
FORMATIONS
MODULE 11
M W M
50
BROADENING
FORMATIONS
WHAT IS A
BROADENING
FORMATION?
51
T H E S T R A T
MODULE PMG 12
M W M
52
PIVOT MACHINE GUN
HIGHER LOW (ENTRY)
HIGHER LOW
MACHINE GUN?
HIGHER LOW
HIGHER LOW
53
T H E S T R A T
COMBINATION
MODULE
WITH 11
TRADITIONAL
TA
M W M
54
COMBINATION WITH
OTHER TA
COMBINE WITH
OTHER TECHNICAL
ANALYSIS EMA STACK
DEPTH OF MARKET
ALTHOUGH THE STRAT CAN BE USED EFFICIENTLY BY ITSELF,
PAIRING THE STRAT ALONGSIDE TRADITIONAL TA CAN YIELD
EVEN MORE CONSISTENCY.
55
T H E S T R A T
MODULE
INTRADAY 12
EXAMPLE
M W M
56
INTRADAY EXAMPLE • THE 30 MINUTE CHART PRESENTS A DIRECTIONAL BAR (2) UP
AND THEN AN INSIDE BAR (1). POSSIBLE 2-1-2 REVERSAL
57
INTRADAY EXAMPLE
• AFTER MARKING ENTRY AND TARGETS ON THE 30 MINUTE
CHART, SIGNALS WILL ALSO APPEAR ON THE 5 MINUTE CHART
STOP • FOR LIMITED RISK, PLACE A STOP ON THE TOP OF THE 5 MINUTE
ENTRY CANDLE ENTERED OFF OF
STOP
ENTRY
TARGET 1
TARGET 2
TARGET 2
5 MINUTE CHART
30 MINUTE CHART – REFERENCE
58
T H E S T R A T
MODULE
SWING 12
EXAMPLE
M W M
59
SWING EXAMPLE • THE WEEKLY CHART PRESENTS A DIRECTIONAL BAR (2) DOWN
AND THEN A DIRECTIONAL BAR (2) UP. POSSIBLE 2-2 REVERSAL
TARGET 2
TARGET 1
SINCE BOTH, THE
MONTHLY AND
ENTRY QUARTERLY CHART
ARE SHOWING
BULLISH PRESSURE
AND
CONTINUATION,
THERE IS TIME
2-2 REVERSAL
FRAME CONTINUITY.
NEXT LOOK AT THE
DAILY CHART FOR
ENTRY AND STOP
60
SWING EXAMPLE
• AFTER MARKING ENTRY AND TARGETS ON THE WEEKLY CHART,
SIGNALS WILL ALSO APPEAR ON THE DAILY CHART
TARGET 3
TARGET 2
TARGET 1
ENTRY
DAILY CHART
WEEKLY CHART – REFERENCE
61