**NEW** CRT Trading Strategy! The 2026 Game Changer

Summary

This video delves into a powerful trading strategy using the CRT model, focusing on time frame analysis, price action, and liquidity. The process begins with identifying candle range lows and highs on the 4-hour chart and refining the analysis on a 15-minute time frame. Two key entry strategies are highlighted: one using a fair value gap with a stop-loss below the gap, and another using the candle range low for a more conservative approach. Emphasizing the importance of market structure and additional confirmation, the video guides traders on improving their risk-to-reward ratios for effective trade execution.

Takeaways

• 😀 Understanding Candle Range Theory (CRT) involves recognizing how higher time frame candles contain detailed price movements that are visible in lower time frames.
• 😀 The 'Power of Three' describes the market flow in three phases: accumulation (sideways movement), manipulation (false breakouts to trap traders), and distribution (price moves in the opposite direction).
• 😀 The CRT model typically focuses on sequences of candles in a higher time frame, with the first candle establishing a price range, followed by liquidity sweeps and reversals.
• 😀 A key to using the CRT model effectively is to ensure that the main reference candle aligns with significant market levels, such as support, resistance, or order blocks.
• 😀 The structure of price movement in a CRT model follows the 'Power of Three,' where accumulation leads to manipulation, which then leads to distribution.
• 😀 CRT setups are more reliable when they occur near points of interest, such as supply/demand zones or key market levels, which statistically increase the chances of a successful trade.
• 😀 A successful CRT setup usually occurs when a breakout from the candle range high or low happens, followed by a reversal that targets the opposite range.
• 😀 Recognizing higher probability CRT setups involves waiting for key conditions to align, such as timing (aggressive candles in certain windows) and market structure (uptrend/downtrend alignment).
• 😀 Time windows during high-volume sessions (like the New York session) can improve the quality of a CRT setup, as these times tend to produce more significant price moves.
• 😀 The CRT model can also work across multiple time frames, but a common approach is to use the 4-hour and 15-minute chart combination for clarity and effectiveness in timing trades.

Q & A

What is the candle range theory in trading?

The candle range theory (CRT) is a concept that helps traders understand the price movement within a single candlestick on a higher time frame, which contains a series of price movements on a lower time frame. It focuses on the range between a candle's high and low and how price action behaves within that range across different time frames.

What are the key elements of a candle?

A candle consists of an opening price, a closing price, a high, and a low. These elements represent the range of price movement within a specific time period on the chart, and by analyzing them, traders can understand the market's behavior.

What is the power of three concept in market flow?

The power of three refers to the three phases of market movement: accumulation, manipulation, and distribution. Accumulation is a period of sideways movement where market makers and retail traders prepare for a significant price move. Manipulation is when the market initially breaks out of the accumulation phase but often traps traders in the wrong positions. Distribution follows, moving in the opposite direction of the manipulation phase.

How does the candle range theory align with the power of three concept?

The CRT aligns with the power of three by using a sequence of candles where the first candle represents accumulation, the second candle involves manipulation by sweeping liquidity, and the final candle represents distribution. This structure mirrors the phases of market behavior seen in the power of three concept.

How can timing impact the effectiveness of the candle range theory?

Timing can significantly impact the success of the CRT. The script mentions specific time windows, like the 4-hour and 15-minute chart combination, as effective for spotting aggressive market moves. The theory suggests that aggressive candles during key times are more likely to lead to high-probability setups, especially when they align with points of interest or key levels.

What role do points of interest and key levels play in the CRT model?

Points of interest and key levels, such as order blocks, supply and demand zones, fair value gaps, and imbalances, are crucial for enhancing CRT setups. These levels are areas where price is more likely to react with strong volatility, and the CRT model becomes more effective when the main candle is located near these significant areas.

How does the candle range theory help in identifying trading opportunities?

The CRT helps identify trading opportunities by focusing on the price range within a candle and how subsequent candles interact with that range. When a price break occurs above or below the candle range high or low, it signals potential setups for either bullish or bearish trades. The model can be used repeatedly, identifying high-probability setups based on price action and liquidity sweeps.

What is a liquidity sweep, and how does it relate to CRT?

A liquidity sweep occurs when price moves aggressively to take out liquidity from stop-loss levels or order blocks, often trapping traders. In the CRT model, this manipulation phase involves sweeping liquidity from the candle range high or low. Traders watch for these liquidity sweeps to determine the likely direction of price movement afterward, which helps in identifying high-probability entry points.

What are the two main positional entry strategies in CRT?

The two main positional entry strategies are: 1) Placing a long buy order at the top of a fair value gap with a stop loss below the gap and a take-profit set above the candle range high. 2) Placing a long buy order at the top of the fair value gap, but with a stop loss below the candle range low, assuming the price won’t break below it before reaching the candle range high. The second approach typically offers a higher win rate with a lower risk-to-reward ratio.

What is the importance of using different time frame combinations in CRT?

Using different time frame combinations can enhance the reliability of the CRT setup. The script emphasizes the combination of the 4-hour and 15-minute time frames as the most effective. However, traders are encouraged to experiment with different pairings to find the most consistent results. The key is to identify aggressive candles and proper entry points based on the price action and trend across time frames.