Candle Range Theory | CRT | The NEW Silver Bullet For Struggling Traders
Summary
TLDRThis video script delves into the concept of candle range theory in trading, emphasizing the importance of understanding each candle's range, from one-minute to four-hour intervals. It highlights three key aspects of an A+ range: inside candles, price action resting above or below, and specific time-based ranges. The script uses examples to illustrate how to identify market liquidity, opening prices, and the narrative behind each algorithmically printed candle. It encourages viewers to apply these insights to their own trading charts for a more strategic approach.
Takeaways
- 📊 Candle Range Theory is about understanding the range of each candlestick chart, including the highs and lows within specific time frames.
- 🔍 Key aspects of an A+ range include inside candles, price action (PDA) resting above or below, and the specific time frame of the range.
- ⏱ Time frames can vary, such as Asia range, daily range, or 4-hour range, and are crucial for identifying liquidity and market movements.
- 📈 Each candlestick represents a range with an opening price, high, low, and closing price, indicating the market's sentiment during that period.
- 💡 Candlesticks are not random; they are algorithmically printed with a narrative, suggesting that patterns can be analyzed and understood.
- 🔑 Inside bars are significant as they indicate accumulation and potential market reversals or continuations.
- 📉 An order block can be created by identifying the range low and high, which can be used for entry and exit points in trading.
- 🚀 Observing the opening, low, high, and closing prices of candles can provide insights into potential market direction and bias.
- 📌 Each candlestick has a 'power of three', which may refer to the importance of the opening, high, low, and closing prices in analysis.
- 📉 The concept of 'time-based premium and discount' is introduced, suggesting that the value of a candlestick can change based on its position within its time frame.
- 📚 The presenter encourages viewers to apply these concepts to their own charts for a deeper understanding and practical application.
Q & A
What is the core concept of candle range theory?
-The core concept of candle range theory is that each candle, regardless of its time frame (1 hour, 4 hours, etc.), represents a range with a high and a low, and it's essential to understand where liquidity is resting and the opening price.
What are the three key aspects of an A+ range according to the script?
-The three key aspects of an A+ range are: inside candles specifically in a higher time frame, PDA (Price Discovery Area) resting above or below, and the specific time the range is occurring (e.g., Asia range, daily range, or 4-hour range).
What does 'PDA resting above or below' refer to in the context of candle range theory?
-In the context of candle range theory, 'PDA resting above or below' refers to the Price Discovery Area being positioned either above or below the range, indicating where the market is finding value and potential support or resistance levels.
How does the speaker describe the formation of each candle in the market?
-The speaker describes each candle as being algorithmically printed with a narrative behind it, implying that there is no randomness in the formation of candles and that each one carries specific information about market sentiment and activity.
What does the term 'inside bar' signify in the context of the script?
-In the context of the script, an 'inside bar' signifies a candle that is completely contained within the previous candle's range, which can indicate accumulation or a period of consolidation in the market.
What is the significance of understanding the 'opening price' in relation to candle range theory?
-Understanding the 'opening price' is significant because it helps in identifying potential entry and exit points for trades. It's used to determine if a market is opening at a premium or discount and can influence trading strategies.
What is the concept of 'sweeping the range low or high' mentioned in the script?
-The concept of 'sweeping the range low or high' refers to the market price moving past the previous low or high of a candle's range, which can indicate a potential shift in market sentiment and may present trading opportunities.
How does the speaker suggest using the daily candle range in trading?
-The speaker suggests using the daily candle range to identify key support and resistance levels, and to look for patterns such as inside bars or accumulation areas that could indicate potential market movements.
What is the importance of recognizing 'fair value gaps' in candle range theory?
-Recognizing 'fair value gaps' is important as they can indicate significant shifts in market sentiment or the presence of large orders. These gaps can provide insight into potential market direction and areas of interest for traders.
How does the speaker define the 'power of three' in the context of each candle?
-The 'power of three' in the context of each candle is not explicitly defined in the script, but it could refer to the three key elements that give each candle its significance: the opening price, the high, and the low.
What is the role of 'narrative' in the formation of each candle according to the speaker?
-According to the speaker, the 'narrative' behind each candle refers to the underlying reasons and market conditions that lead to its formation. It suggests that each candle's creation is not random but is a result of specific market dynamics.
Outlines
📈 Introduction to Candle Range Theory
The speaker introduces the concept of candle range theory, emphasizing its simplicity at its core. They explain that each candlestick, regardless of its time frame (1 hour, 4 hours, etc.), represents a range with high and low points. The theory also involves identifying where liquidity is resting and the opening price. Three key aspects of an 'A+ range' are highlighted: inside candles on a higher time frame, price action (PDA) resting above or below, and specific time-based ranges such as daily or Monday ranges. The speaker also discusses the importance of recognizing the power and narrative behind each candlestick, which are algorithmically printed and not by chance. Examples are given to illustrate single candles as ranges and how higher time frames can become lower time frame ranges, using the daily candle on the Euro as an example.
📉 Analyzing Market Structure and Entry Points
This paragraph delves into analyzing market structure using candle range theory, focusing on identifying entry and exit points. The speaker describes how to use the opening low and high of the 4-hour candle to create an order block and discusses the significance of sweeping the range high and low. They mention the importance of recognizing support and resistance levels, fair value gaps, and market structure shifts. The speaker provides an example of how to catch the open, low, high, and close of a candle, and how to use these to form a bias for future trades. They also touch on the concept of time-based discounts and premiums associated with each candlestick, urging viewers to apply these concepts to their own chart analysis.
📊 Key Aspects of Candle Range Theory and Practical Application
The speaker wraps up the discussion by summarizing the three key aspects of candle range theory: identifying inside candles, recognizing price action resting above or below, and understanding specific time ranges. They stress the importance of considering each candle's range, open low/high, and close high/low. The speaker also highlights that each candle has its own time-based premium and discount, and each is algorithmically printed with a narrative. They encourage viewers to study and apply these concepts to their trading, hoping that the information provided will be beneficial and enhance their understanding of market dynamics.
Mindmap
Keywords
💡Candle Range Theory
💡Liquidity
💡Opening Price
💡Inside Candle
💡PDAs (Price Action)
💡Time Frame
💡Range High and Range Low
💡Order Block
💡Fair Value Gap
💡Bias
💡Algorithmic Printing
Highlights
Introduction to candle range theory for a simple understanding of market movements.
Each candlestick, regardless of time frame, represents a range with high and low points.
Key aspects of A+ range include inside candles, liquidity resting points, and specific time frames.
Understanding the opening price and where liquidity rests is crucial for trading decisions.
Candlestick analysis involves recognizing patterns like inside bars and accumulation areas.
Market movements are not by chance; each candlestick is algorithmically printed with a narrative.
Examples of single candles being a range and higher time frame becoming a lower time frame range.
Analyzing daily candles for inside bars and accumulation to predict market movements.
Importance of observing the order block and resistance levels within candle ranges.
Using the range low and high to make informed trading decisions.
The concept of time-based premium and discount in relation to candlestick analysis.
Identifying market bias and potential re-entry points after analyzing candlestick patterns.
The significance of the opening, low, high, and closing prices within each candlestick.
Applying candle range theory to 4-hour candles for trading strategies.
Recognizing market structure shifts and using them to inform trading decisions.
The importance of each candlestick having a power of three and its own time-based premium and discount.
Encouragement to study and apply candle range theory to personal trading charts.
Transcripts
[Music]
how's everybody
doing back
again going over candle range Theory
today right just my pretty much simple
understanding of it all right I have
more than a simple understanding but
it's pretty simple to understand right
at the core of
it each
candle and I mean each candle 1 Hour 4
Hour the one minutes within the 4 Hour
right every candle is a range right we
we go range high range low range Low
Range
High
right with candle range
Theory we also want to have the key
noted or the key notes of where is
liquidity resting
when and where is our opening
price all right there's three key
aspects to an A plus
range right we have inside
candles specifically higher time frame
inside
candles we have pdas resting above or
below as well as are these ranges at
specific time
based excuse me are these ranges at
specific specific
times right whether an Asia range
or right a daily range or just a
4our right Monday range where we
accumulated the whole
Monday all
right as well as your just your simple
4H hour candle range your 1 hour candle
range your daily candle range right
every candle has a range right a premium
and a discount an open low high close
and an open high low close right each
candle has its own power of
three right as well as
AMD and what you should always know is
each candle is printed alri Al Jesus
Christ there's no
winning each candle is printed
algorithmically and with a narrative
behind
it right nothing is by luck nothing's by
chance all of these
candles are algorithmically printed and
have everything listed below right we're
going to get into a couple examples of
right single candles being a range as
well as that higher time frame becoming
a lower time frame
range all right so we
see in our face we have a daily candle
on Euro
given us an inside
bar
right clear
accumulation we have a high of our
accumulation and a
low come into a lower time frame see we
start to break leave a fair value
Gap mitigate
it right and Wick above the Range
High we then come back to our order
block rejection block right then
continue to break
lower right we have low resistance
liquidity as well as the bottom of our
range we see within this daily candle
right we sop the the daily
high right and continued to the
low all right here we have right in
front of us another right inside bar on
the 4 time frame with two equal lows
below so what would you want to see here
all right would you yourself want to see
the next 4H hour candle all right open
high
low close right R open low high
close all right and you don't I mean you
don't even have to predict it per se
right you can just look for one or the
other
right we have an order block resting
below FEG resting
above we have our
range still in a range right sweep the
range
low so we now have our
open low
right of the daily candle we
opened
Low by below the opening price of the
4our candle sweep
right create an order
block
right so how we swept range low now we
swep Range High and you're going to say
oh should we continue
lower right but I would say
no right you have low resistance resting
above right obvious fair value Gap
obvious fair value
Gap swept the equal
lows fake Market structure
shift didn't get a nice sweep of our
range low for another
re-entry but we see right we did on the
daily open open low high close
I was just going to say right there I
clicked one two ahead right see we
haven't break broken any external High
Right started to accumulate Swip the
accumulation low right higher breaker
come back into the order
block right the day closes we open low
sweep the low here high and then close
right higher on the day
and that's just you know simply used in
the 4-Hour candles right sweeping either
previous day low or internal to external
right we saw Here We swept the range low
and the previous day low and then
continued us higher into our FEG and we
do have a market maker model
here right but we also have an
feeg and we could retrace lower right
back to our break then continue higher
right and then we can form a bias from
there right but we saw how we caught the
open
low high
close all right and if you're still a
little bit confused that's all right
right we want to keep keep in mind right
our three key
aspects inside
candle right PDA is resting
right as well
as which specific time candle is
it all right each candle has our open
low high close right our open high low
close
right and as well with each
candle right we draw a Candlestick here
right we draw our
Candlestick we have our opening price of
the 4our candle here say this is a
4our
right if you're looking for a
open low high
close you want to buy below the opening
price and a
discount
right right and a Time based discount
right because each
candle right has a premium and
discount
right zoom out just a little bit
more right each specific candle has its
own right you have your
EQ right same way with we use the the
daily
candle you have your
high your
low you're
open and you're
close all right that leaves you with an
EQ of the
candle
right as well as if you open you have
your timebase discount right leading in
to your time base
premium
right after you open low then High close
all
right all right and on your own
charts I want you to kind of use your
head and see how of each candle right we
go to the range low of the candle and
Range High range Low Range High internal
external internal external internal
external right we saw where liquidity
was resting and where was our opening
price right whether it be a previous day
liquidity right previous session right
yada yada yada we went over the three
key aspects to our A+ range with an
inside candle PD resting above or below
and our specific time
range right we want to always keep in
mind each candle has a range each candle
has an open low high close open high low
close all right if that's I think I yeah
um each candle has a power of three each
candle has its own time based premium
and discount each candle has its own
AMD and each candle is printed aloric
and with a narrative based behind it
hope you learned something from this
episode hope you enjoy and right hope
you can you know study and input this
into your own charts y'all have a good
one stay safe
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