A Comprehensive Setup Guide for TheStrat

🔢 Strat Candle Types

Each candle in The Strat falls into one of three broad types:

Type	Definition	Candle Description
1	Inside Bar	High < prev high AND Low > prev low
2	Directional Bar	Breaks either high or low of previous bar
3	Outside Bar	Breaks both high AND low of previous bar

📘 Strat Setup Glossary

Pattern	Description	Type Combo	Bias
2-1-2	Continuation or reversal after inside	2-1-2	Bull/Bear
2-2 Reversal	Trend reversal	2-2	Bull/Bear
3-1-2	Reversal after broadening + contraction	3-1-2	Bull/Bear
1-2-2 RevStrat	Failed breakout reversal	1-2-2	Bull/Bear
3-2-2 Reversal	Outside bar reversal	3-2-2	Bull/Bear
2-1-1 Continuation	Multi-timeframe continuation	2-1-1	Bull/Bear
3-1-3 Pivot Machine Gun	Outside-in then outside again	3-1-3	Bull/Bear
2-1-3	Inside bar → then outside	2-1-3	Bull/Bear
3-2-1	Outside bar → directional → inside	3-2-1	Consolidation
3-3	Outside bar after outside bar	3-3	Trend continuation

🔄 Explanation of Each Strat Setup

✅ 1. 2-1-2 Continuation or Reversal

• Directional bar → Inside bar → Breaks same direction
• 🔼 Bullish: Previous bar 2-up → Inside bar → Break above high
• 🔽 Bearish: Previous bar 2-down → Inside bar → Break below low

✅ 2. 2-2 Reversal

• 2-down → 2-up = Buy above second bar’s high
• 2-up → 2-down = Sell below second bar’s low
• 📌 Often occurs at pivots or trend exhaustion

✅ 3. 3-1-2 Reversal

• Outside → Inside → Breaks directionally
• 🔼 Bullish: Strong reversal setup
• 🔽 Bearish: Often used at broadening formation tops/bottoms

✅ 4. 1-2-2 RevStrat (Reversal Strat)

• Inside → Breaks one way → Fails → Full reversal
• ⚠️ Very powerful — catches trapped traders

✅ 5. 3-2-2 Reversal

• Outside → Directional → Reverse
• Used after failed breakout/spike

✅ 6. 2-1-1 Continuation

• Directional → Inside → Inside → Same break
• 🔼 Entry above final inside bar high
• 🔽 Entry below final inside bar low

✅ 7. 3-1-3 “Pivot Machine Gun”

• Outside → Inside → Outside again
• Suggests repeated reversal attempts → explosive move

✅ 8. 2-1-3 Reversal

• Inside bar breaks both sides
• Used in broadening formations

✅ 9. 3-2-1 Contraction

• Outside → Directional → Inside
• Signals coiling or exhaustion

✅ 10. 3-3 “Outside Continuation”

• Two outside bars in a row
• Momentum building setup

🧮 Visual Summary

Pattern	Combo	Action	Bias
2-1-2	Continuation/Reversal	Follow break of 1-bar	Both
2-2	Reversal	Follow break of 2nd bar	Both
3-1-2	Compression → Expansion	Follow break of 1-bar	Both
1-2-2	RevStrat	Follow reversal candle	Both
3-2-2	Reversal	Follow break of final 2-bar	Both
2-1-1	Continuation	Follow 2nd inside bar	Both
3-1-3	Momentum	Follow break of 2nd outside	Both
2-1-3	Broadening	Follow direction of 3-bar	Both
3-2-1	Consolidation	Wait or prep next setup	Neutral
3-3	Volatility	Follow 2nd outside bar	Both

🎯 Strategic Application

Each pattern becomes more powerful with FTC alignment:

• 📈 Longs = Monthly, Weekly, and Daily green
• 📉 Shorts = Monthly, Weekly, and Daily red

💡 Use these setups on higher timeframes (weekly/monthly) to plan next week’s plays (great for Sunday night
scans).

✅ Next Step

🧠 A Sunday prep worksheet for finding weekly setups