If you've been exploring ways to improve your day trading results, you might have come across something called "The STRAT." It's a relatively new but fast-growing trading strategy that's shaking up how traders think about price action. The STRAT (short for "strategy") offers a simple, rules-based approach to trading using just the raw data from candlestick charts—no complicated indicators required.
In this guide, we'll break down The STRAT in simple, easy-to-understand language. Whether you're brand new to trading or someone looking to sharpen your edge, this article will show you how The STRAT works, why it's effective, and how you can start using it in your own trading today.
What Is The STRAT and Why Does It Matter?
The STRAT is a price action-based trading strategy created by Sarah Strat Sniper. It stands out because it doesn't rely on traditional indicators like moving averages, MACD, or RSI. Instead, it focuses on just three things: the highs and lows of price candles, the direction of the price, and how different time frames align.
At its core, The STRAT is about reading what the market is telling you, directly from the charts. It looks at patterns based on whether a candlestick is breaking above or below the range of the previous candle. This simple framework forms the foundation for powerful trade setups that can be used across any market—stocks, options, crypto, and forex.
Traders love The STRAT because it's logical, repeatable, and eliminates a lot of the guesswork. It gives you specific setups and rules to follow, which helps remove emotion from trading decisions.
Understanding the Three Candlestick Types in The STRAT
The entire strategy is based on just three types of price candles. Once you learn to recognize these, you'll start to see The STRAT patterns everywhere.
Type 1 - Inside Bar
This happens when a candle's high and low are completely within the range of the previous candle. It's a sign of price consolidation or indecision. Think of it like the market is taking a breather and deciding where to go next.
Type 2 - Directional Bar
This is when a candle breaks either above or below the previous candle's range, but not both. It shows a clear direction, either upward or downward.
Type 3 - Outside Bar
This is when a candle breaks both the high and the low of the previous candle. It represents high volatility and sometimes a shift in market sentiment.
These three bar types form the foundation of all STRAT setups. Everything you do with The STRAT builds from this simple classification.
Key STRAT Entry Setups You Need to Know
Now that you understand the three basic types of candles, let's talk about how they combine to create powerful trading setups.
2-1-2 Reversal
This means you have a directional bar (2), followed by an inside bar (1), and then another directional bar (2) that moves in the opposite direction of the first. It often signals a trend change. Traders love this pattern because it offers a clean entry point, often at the break of the inside bar's range.
3-1-2 Reversal
In this pattern, the outside bar (3) indicates volatility, the inside bar (1) shows consolidation, and the directional bar (2) confirms a new direction. It's a great setup for catching early trend reversals.
1-2-2 Continuation
This pattern shows a brief pause in an ongoing trend. It starts with an inside bar (1), followed by a directional move (2), and then another directional move (2) in the same direction. This setup helps traders jump into an existing trend without chasing it too late.
Each of these setups provides clear rules for entry, stop-loss, and target levels, which is one reason why The STRAT is so popular among disciplined traders.
The Power of Full Time Frame Continuity (FTFC)
One of the most unique features of The STRAT is the concept of Full Time Frame Continuity, or FTFC for short. This simply means that price is moving in the same direction across multiple time frames.
Let's say the monthly, weekly, daily, and hourly candles are all green—that's full time frame continuity to the upside. It tells you that the overall momentum is bullish, and it gives extra confidence to take long trades. The opposite is true if all time frames are red.
FTFC helps you avoid fighting the broader trend. It ensures you're trading in the direction that has the most backing from larger time frames. Think of it as surfing with the current instead of against it. By aligning your trade with FTFC, you increase your chances of success.
Many traders use charting platforms like TradingView or TrendSpider to visually confirm FTFC before taking any trades.
How to Scan for STRAT Setups on Your Charts
You might be wondering how to find these patterns in real time. The good news is you can automate much of the process.
Platforms like TrendSpider and TradingView offer tools to build custom scans. These scans can search for specific bar combinations like 2-1-2 or 3-1-2 setups across hundreds of tickers. Some communities even share free scripts that you can plug into your platform.
If you prefer doing things manually, you can still spot setups by visually scanning your charts. The more you practice, the faster you'll recognize the patterns. Many traders develop a "muscle memory" for STRAT setups after a few weeks of studying charts.
RELATED READ: Flag Patterns in Stocks: How to Trade Bull and Bear Flags Like a Pro
Real Chart Examples: Seeing the STRAT in Action
Let's walk through a simple example. Imagine a stock has formed a 2-1-2 reversal on the daily chart. The first 2 was a bearish candle breaking below the previous day. The 1 was an inside bar where the stock took a breather. Then the next candle broke above the inside bar and closed higher. That last candle is your entry signal.
You might enter at the break of the inside bar's high, set a stop just below the inside bar's low, and set your target based on the previous swing high. If the broader trend supports your direction (thanks to FTFC), this setup has a strong chance of working out.
Using screenshots and chart annotations can help you learn faster. Try to journal a few STRAT setups every week and review your results.
Using a Profit Calculator With STRAT Trading
Tracking your profits and losses is just as important as finding good setups. This is where a tool like a day trading profit calculator can be incredibly helpful.
With The STRAT, many traders aim for setups with a strong risk-to-reward ratio, like 1:2 or 1:3. For example, if your stop loss is $0.50 below your entry, your target might be $1.00 or $1.50 above it. A profit calculator can help you plan these trades and understand your potential returns before placing the trade.
Websites like DayTradingProfitCalculator.com offer free calculators that let you plug in your entry price, stop loss, target, and number of shares. It shows your potential gain or loss in dollars and percentages, helping you stay consistent and realistic.
Using a profit calculator also helps you manage your emotions. When you know the math behind your trade, you're less likely to panic or get greedy.
The STRAT Strategy: Strengths and Weaknesses
No strategy is perfect, and The STRAT is no exception.
Strengths
- Simplifies trading decisions with clear rules
- Works on any time frame and in any market
- No lagging indicators required
- Clearly defined entry and exit points
- Great for building discipline
Challenges
- Has a learning curve for pattern recognition
- Requires discipline to follow rules strictly
- Need to check multiple time frames
- Takes time and focus to master
- May not suit very casual traders
Who Should Use The STRAT?
The STRAT is a great fit for active day traders, scalpers, and swing traders who want a rule-based system. If you're someone who prefers structure and doesn't like guessing, The STRAT could work well for you.
It's especially useful for traders who want to get better at reading price action. If you can commit to practicing the patterns and reviewing your trades, The STRAT can become a powerful tool in your trading toolbox.
That said, it might not be ideal for passive investors or those who don't have time to watch charts during the day. Like any trading method, it takes time to learn and refine.
How to Learn and Practice The STRAT
If you're ready to dive in, start by watching free YouTube videos on The STRAT. Sarah Strat Sniper's original videos are a great place to start. You'll also find lots of other experienced traders sharing their tips and setups.
Join online communities like Twitter's #TheSTRAT community, or look for Discord groups dedicated to it. These are great places to ask questions, share charts, and learn from others.
Practice on paper or with a trading simulator before going live. This helps you build confidence and get used to spotting setups in real time. Journaling your trades and reviewing them regularly will also help you improve faster.
And of course, keep tools like a profit calculator nearby to help you manage your trades wisely.
Final Thoughts: Is The STRAT Right for You?
The STRAT offers a fresh, practical approach to trading that strips away the noise and focuses on what really matters: price. With a bit of practice, anyone can learn it. It gives you a clear framework for spotting opportunities, managing risk, and trading with confidence.
Whether you're looking to make a few trades a week or build a full-time trading strategy, The STRAT is worth exploring. By focusing on simple price structures and time frame alignment, you can become a more consistent and informed trader.
So if you're ready to take your trading to the next level, give The STRAT a try—and don't forget to bring your profit calculator along for the ride.
Frequently Asked Questions (FAQs) About The STRAT Trading Strategy
Can The STRAT strategy be automated for day trading?
Yes, The STRAT can be partially automated using trading platforms that support custom scripts and alerts, like TrendSpider, TradingView, or Thinkorswim. While full automation (executing trades without human input) is more complex and risky, many traders automate scanning for setups like 2-1-2 or 3-1-2 patterns, or alerts for full time frame continuity (FTFC). However, discretionary judgment is still needed to confirm context and manage trades.
Is The STRAT suitable for trading crypto and forex, or just stocks?
The STRAT works on any market that uses candlestick charts, including crypto, forex, futures, and options. Because it's based purely on price action and not tied to specific assets, it's flexible across all tradable instruments. Many crypto day traders now use The STRAT on lower time frames like 15-minute or 1-hour charts.
What is the best time frame to use The STRAT strategy on?
There's no single "best" time frame—it depends on your trading style. Scalpers may prefer 1-minute to 5-minute charts. Day traders often use the 15-minute, 30-minute, and 1-hour charts. Swing traders look at daily and weekly charts. The key is aligning your entry time frame with higher ones using full time frame continuity (FTFC) to increase the probability of success.
What are the most common mistakes traders make when using The STRAT?
Some of the biggest mistakes include: Trading without confirming FTFC, forcing setups that aren't fully formed (like guessing a 2-1-2 before it triggers), ignoring risk management and stop-loss discipline, and overtrading by jumping into every inside bar or outside bar without context. To succeed with The STRAT, traders need to follow the rules strictly and avoid emotional decision-making.
How long does it take to get good at using The STRAT?
It varies by individual, but most traders need at least a few weeks of focused practice to start recognizing patterns and applying them correctly. Journaling your trades, backtesting setups, and participating in STRAT communities (like #TheSTRAT on Twitter or Discord groups) can speed up the learning curve. Like any strategy, mastery takes time, repetition, and reflection.
What tools or platforms are best for practicing The STRAT?
TradingView and TrendSpider are highly recommended because they allow multi-timeframe analysis, custom alerts, and community-shared scripts. You can also use Thinkorswim (by TD Ameritrade), NinjaTrader, or even free charting platforms if they support inside/outside bar recognition. For practicing without risk, paper trading tools and trade journaling spreadsheets or apps like TraderVue are helpful.
Can The STRAT strategy be combined with indicators or is it purely price action?
While The STRAT is built on the idea of raw price action, some experienced traders combine it with volume analysis, anchored VWAP, or broadening formation indicators. However, beginners are encouraged to first master The STRAT without indicators to understand its simplicity and structure before adding complexity.
What makes The STRAT different from other price action strategies?
The STRAT stands out because it classifies all candles into just three types (1, 2, or 3), and then uses these in specific combinations with rules-based setups. It also emphasizes full time frame continuity (FTFC), which many other price action methods overlook. The result is a complete framework—not just entry signals, but a full methodology for trade selection, direction, timing, and management.
Follow Us On Social Media