Candle Range Theory (CRT) is an ICT-based trading model that typically involves a three-candle sequence defining the range, sweeping liquidity, and entering to catch reversals or continuations.
Core CRT Strategy Breakdown
1. Identify the Range (Candle 1): Select a significant higher timeframe (HTF) candle (e.g., H1, H4, or Daily) and mark its high (CRH) and low (CRL). These act as liquidity pools.
2. The Sweep (Candle 2): Look for a second candle to move outside the range (a "false breakout" or "manipulation"). The price must sweep liquidity above the CRH or below the CRL but fail to close beyond it.
3. The Entry (Candle 3): Enter on the third candle when the price returns inside the range, suggesting a shift in the market direction.
โ Bearish Setup: Second candle sweeps above the CRH, fails, and closes inside. Short on the third candle targeting the CRL.
โ Bullish Setup: The second candle sweeps below the CRL, fails, and closes inside. Long on the third candle targeting the CRH.