The Strat

How it works

The Strat Bar Type Identifier analyzes each candle's relationship to the previous candle's price range, categorizing bars into four distinct types based on their price action characteristics. It systematically identifies Inside Bars (completely within previous candle's range), Two-Up and Two-Down bars (breaking previous high or low), and Outside Bars (breaking both previous high and low).

The script assigns a numerical identifier to each bar type, with '1' representing Inside Bars, '2' for Two-Up or Two-Down bars, and '3' for Outside Bars. These identifiers are plotted below each candle, creating a visual representation of price structure that helps traders quickly understand the market's current dynamics and potential directional shifts.

Why it may be useful

The Strat Bar Type Identifier provides traders with a pure price action tool that eliminates lagging indicators and focuses solely on price structure and market behavior. By breaking down price movements into recognizable patterns, it helps traders understand market consolidation, potential breakouts, and directional shifts without relying on complex mathematical calculations.

This method is particularly valuable because it simplifies complex price action into easily identifiable components, allowing traders to quickly assess market sentiment and potential trading opportunities. It serves as a foundational tool for more advanced strategies like the 3-1-2 reversal or 1-2-2 continuation, making it an essential technique for traders seeking to understand market dynamics.

When to explore it

The Strat Bar Type Identifier works best in markets with clear price action and during periods of potential trend changes or consolidation. It is particularly effective in identifying potential breakout scenarios, where price is preparing to make a significant move after a period of balance or compression.

Traders should use this tool across multiple timeframes to confirm signals and gain a comprehensive understanding of market structure. It is especially useful in volatile markets where price action provides more meaningful insights than lagging technical indicators, making it valuable for traders in forex, stocks, cryptocurrencies, and other liquid markets.

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