1 The Story
A Chicago floor trader who simplified price action
Rob Smith was a veteran floor trader who distilled technical analysis into a single, objective framework he called The Strat — and built a large, devoted following around it before his death in 2023.1
Trading was in his blood: his father ran Merrill Lynch's institutional desk at the CBOE, and Rob worked there during high-school summers, developing an early love of technical analysis. He went on to spend more than 20 years as a trader on the floor of the Chicago Stock Exchange, and later taught his method through the "Smith's In the Black" live room. He passed away in July 2023 after a short illness, leaving an active #TheStrat community.1
2 The Big Idea
There are only three things a candle can do
Every candle is a 1 (inside), a 2 (directional), or a 3 (outside) — no exceptions.
By reducing price action to three objective scenarios, The Strat removes subjective chart-reading and indicators entirely, and trades the precise moment a candle takes out the prior bar's high or low.2
3 The Method & Setups
Scenarios, combos & Full Timeframe Continuity
The three scenarios
1 = inside bar (consolidation); 2 = directional (2U takes the prior high, 2D the prior low); 3 = outside bar (takes both — an expansion).2
Actionable combos
Recognisable sequences such as the 2-1-2 and 1-2-2 reversals, the 3-1-2, and 2-2 continuations — triggered by the break of the prior bar.2
Full Timeframe Continuity
Only take signals when the higher timeframes agree on direction — the discipline that filters for the strongest trades.2
No indicators
Purely price action, broadening formations, and timeframe continuity — no moving averages, RSI, or MACD.2
4 Try It Today
Test the idea for yourself
A no-risk exercise
Open any chart and label each candle as a 1, 2U/2D, or 3 until it becomes automatic. Then check whether the daily, hourly, and weekly are all pointing the same way (Full Timeframe Continuity) before you'd consider a trade — and notice how rarely everything lines up.
5 In Their Words
Rob Smith, in essence
There are only three things a candle can do: stay inside the prior bar, take out one side, or take out both. Master that, and align your timeframes.— a paraphrase of his core teaching2
A note on sourcing: the line above paraphrases the central idea of The Strat, not a verbatim quotation.
6 The Method on This Site
His framework, as a playbook
The Strat
Rob Smith · taught via "Smith's In the Black"- Three scenarios, actionable combos, FTFC. An objective, indicator-free way to read price across timeframes.2
7 Watch & Read
Go deeper
- PLAYBOOKThe Strat — his method as a playbook.
- CONCEPTCandlestick patterns — the bars he labels.
- READThe Strat — overview & review.
§ Sources
- Rob Smith — biography & passing — Stocks & Futures Trading; TradingReviewers.
- The Strat method — scenarios, combos, Full Timeframe Continuity — #TheStrat breakdown with Rob Smith (TrendSpider).