Create, Negate, or Do
Rob Smith asks it the same way every time, on every timeframe, before every trade, and again after the trade is on. Four questions, each with two answers:
- What is the next 2? Up, or down.
- What will it negate? A continuity level (a timeframe flips across its opening price) or a higher-timeframe signal that it counters.
- What will it create? A new actionable signal on the timeframe above, or full timeframe continuity.
- What will it do? Retrace the previous range (back through the broadening formation) or break out of it.
Ask it twice. If this works, what will it create, negate, or do? If this fails, what will it create, negate, or do? A 60-minute 2u that works may put a daily signal in force; the same 60 failing may create a daily 2d-2u against you with continuity behind it. Rob’s pool analogy is to play the shot so that it leaves you the next one. The three sections below are the three answers, each on a real chart, each read the same way: the signal on the lower timeframe is the cause, and what changes on the higher timeframe is the effect.
Do: the 60-minute reversal that puts the daily signal in force
The domino runs from higher timeframe to lower: the daily signal is set up, and a lower-timeframe move is what triggers it. That is the most common answer to “what will it do?” The next 2 on the 60 does something to the day. Here the daily setup is an inside bar (a 1-bar rev strat waiting to happen), and the 60-minute prints a 2d-2u hammer reversal at the bottom of a 60-minute broadening formation. The reversal on the 60 is what sends price up through the inside day’s high, and the daily 1-3u goes in force.
How to read it. The first hour takes the inside day’s low: the day is a 2d, and the trapped side is the seller who sold that break. The hour closes as a 2d hammer with its low at the bottom of the 60-minute formation: lower lows and higher highs behind it, so the formation is expanding, and its far side is the target. The next hour goes 2u through the hammer’s high: the 60-minute 2d-2u is in force. What will it do? It sends price into the inside day’s high, and when that breaks the 2d day becomes a 3: a daily 1-3u rev strat, in force, with the 60 as the cause.
Negate: the daily 2u that flips the week
To negate is to change continuity: the last sale goes back through a higher timeframe’s opening price, and that timeframe flips from one colour to the other. A change in continuity puts the previous group at an immediate loss: green to red puts buyers at a loss, red to green puts sellers at a loss. Negating is what builds hammers and shooters on the higher timeframe, and the 2d + green and 2u + red reversal setups. Here the week is red into Thursday, and Friday’s daily 2u is what takes the last sale back through the weekly open.
How to read it. Wednesday goes 2d and Thursday closes inside: a daily 2d-1-2u setup whose trigger is Thursday’s high. The week opened at 642.86 and Thursday closed 7 dollars under it: the week is red, and the weekly open is the next level up. Friday takes the trigger five minutes in; the daily 2u is in force. What will it negate? The week. At 10:00 the last sale goes through 642.86, the weekly bar flips red to green, and every seller from Monday to Thursday is at a loss. What did that create? The week closes as an outside-bar hammer, which is a weekly 3-2u for the following week, and it fired.
Rule: any time you trade a negation you are trading conflict. A trade that fails to negate, and fails to create a setup, is closed.
Timing: early in a higher-timeframe open, negating puts higher-timeframe signals in force; in the latter half of the open, negating is used to create signals for the next period.
The check: are you anywhere near reversing the higher timeframes? If the month, week and day are bright green and the 60 comes in, that is profit-taking, not a negation. You are not turning the week red from there. See corrective activity.
Create: the Thursday hammer that builds the weekly signal
A create runs the other way from the domino: lower timeframe to higher. A signal that works on the lower timeframe builds a new bar shape, and therefore a new setup, on the timeframe above it. Most weekly hammers, weekly inside bars and weekly shooters are created by one Thursday or Friday. Here a Thursday 2d hammer day is the low of the week; it turns the weekly bar into a 2d hammer, and the following week goes 2u through the hammer’s high: a weekly 2d-2u reversal that one daily bar created.
How to read it. Monday to Wednesday go 2d; the week is red and pressing lower. Thursday gaps down, prints the low of the week in its first hour, buyers hold it all day, and the day closes as a 2d hammer. Look right: that hammer’s wick is the weekly bar’s wick. Friday goes 2u and the week closes as a 2d hammer, trigger at the week’s high. What did Thursday create? A weekly reversal setup that did not exist on Wednesday. Monday of the following week goes through the trigger, and the weekly 2d-2u is in force. The same mechanics build a weekly inside bar when the Thursday or Friday hammer holds the prior week’s low instead of taking it. Then the following week is a weekly 1-2u.
Overview: three ways to hunt
Open the chart on four or more timeframes for every signal and ask: what is the next 2, and if it works, what will it create, negate, or do? The answer sorts the trade. Trading dominos: look for lower-timeframe signals that put higher-timeframe signals in force (do). Setting up next week: look for signals that build the next bar shape one timeframe up (create). Trading a change of control: look for the signal that takes the last sale back through a higher-timeframe open (negate), and only when the higher timeframes are close enough to be reversed. Every trade can be found under these three answers; the work is deciding which one you are seeking before the 2 prints. See confirming & negating for the bar-by-bar version of the same evidence test, and actionable signals for the setups being created.
Related: Confirming & Negating · Signals + Signals · Opening Price · Conflict · 1-Bar Rev Strat · Hammer
Back to: Actionable Signals →
TheStrat was developed by Rob Smith. These docs are written by Alex Sopa (AlexsOptions) and quote his teaching. Work in progress: spotted an error? Tell Alex.
For AI agents: free TheStrat tools (MCP and REST) at thestrat.ai/agents.

