The Widening Channel

When volatility expands, the channel widens. Highs push higher. Lows push lower. The range expands. Currents clash. This is not random noise — it is a specific pattern with specific rules, and it precedes some of the most violent directional moves in the market.

THE STRAT identifies three advanced volatility patterns that occur within widening channels:

1. Triangle They Out (TTO) — corrective accumulation on lower timeframes
2. Broadening Formations — the larger-scale structural version of TTO
3. Pivot Machine Gun (PMG) — the explosive release of trapped stops

Triangle They Out (TTO)

Definition: "Triangle They Out is corrective activity. Price will take out the highs and lows, essentially creating an Outside Bar (3) on larger timeframes."

What It Is

Price oscillates, taking out previous highs AND lows in succession. This creates a triangular or broadening pattern on higher timeframes. It is consolidation and accumulation before a directional move.

Visual Characteristics

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Why "They Out"

"They" = market makers, algorithms, smart money. Taking out highs = stopping out shorts. Taking out lows = stopping out longs. Both sides stopped out = accumulation complete.

Trading Approach

1. Recognize TTO — identify the oscillating pattern.
2. Wait for conclusion — do not trade within the triangle.
3. Find entry — when directional move resumes (break of triangle boundary).
4. Direction — determined by higher timeframe trend (FTFC).

"Wait for this corrective activity to conclude and find entry."

Broadening Formations

Definition: "Broadening Formations occur when highs and lows are progressively taken out on a given timeframe. Connecting these highs to higher highs and lows to lower lows results in the creation of a Broadening Formation."

Visual

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Characteristics

1. Progressive expansion — each swing is larger than the last
2. Volatility increasing — market becoming more unstable
3. Both sides active — buyers and sellers fighting
4. Provides targets — formation boundaries = S/R levels
5. Future S/R — after breakout, formation levels remain significant

Relationship to TTO

• TTO = Broadening Formation on a smaller timeframe
• Same mechanics, different scale
• TTO is intraday; Broadening Formation can be any timeframe

Trading Application

Within the Formation: Avoid new entries. Trade only confirmed breaks of formation boundaries.

Breakout Trading: Break above upper boundary = bullish continuation. Break below lower boundary = bearish continuation. Use formation width for target projection.

Target Projection: Measure formation height (high to low). Project from breakout point. Example: Formation 10 points wide, breakout at 100 = target 110.

"This can provide targets and future points of support and resistance."

The Pivot Machine Gun (PMG)

Definition: "A Pivot Machine Gun is a series of higher lows or lower highs. Each of these points are where traders' stops are. Essentially when taken out, traders must cover or sell their position, adding to the growing momentum."

Mechanics

1. Series of higher lows (uptrend) or lower highs (downtrend) forms
2. Each pivot = where traders placed stops
3. When pivot is taken out, traders must cover or sell
4. Stops taken out in rapid succession
5. Results in volatile reversal

Visual — Higher Lows PMG (Bullish to Bearish)

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   [ENTRY]|[STOP RUN]

Visual — Lower Highs PMG (Bearish to Bullish)

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[STOP RUN]|[ENTRY]

Trading Application

Recognizing PMG: Count consecutive higher lows or lower highs. 3+ pivots = PMG formation developing. More pivots = more stops to run = more violent break.

Trading the Break: Enter in direction of PMG break. Use last pivot as entry reference. Anticipate volatile move.

Targets: Measure distance between pivots. Project from break point. PMG moves often exceed typical targets.

Risk Management

• PMG breaks can be violent and fast
• Use wider stops initially
• Trail stops aggressively once in profit
• Don't chase — enter on confirmation, not anticipation

"This causes the stops to be taken out in rapid succession and a volatile reversal to take place."

Where We Don't Want to Be

Zone	Why It's Dangerous	What To Do
Inside a 1 on higher TF	Consolidation chop	Wait for breakout
Middle of a Broadening Formation	Both sides active, no edge	Wait for boundary break
During TTO oscillation	Stop-running, accumulation	Let it conclude
Chasing a PMG without confirmation	Entering into exhaustion	Wait for the pivot break

The Mother Bar Concept

The Mother Bar is the candle that contains the Inside Bar (1). Its range defines the magnitude of the potential move. A large Mother Bar followed by a small Inside Bar suggests significant energy coiled for release. When the breakout comes, it often travels the full width of the Mother Bar or more. Use the Mother Bar's range to estimate target magnitude for 2-1-2 and 3-1-2 setups.

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