[00:02] simple trading concept, but for some reason many traders tend to overcomplicate it. In this video, you will learn what candle range theory is and how it works. How CRT connects with the power of three.
[00:14] How to identify bullish and bearish CRT setups. The best time frames to use with CRT. How to find your entry, stop loss, and profit target. How to combine CRT setups. Real chart examples showing you how to
[00:30] apply CRT in the market. Before you can understand candle range theory, you first need to understand one simple idea about candlesticks. Every candlestick you see on a higher time frame is actually made up of multiple candles on
[00:43] a lower time frame. For example, look at this candle on the daily chart. At first, it looks like just one candle. But if we drop down to the one-hour chart, we can see the price movements that actually formed that candle. And
[00:56] create a range. The highest price reached inside that range corresponds to the high of our higher time frame candle. In candle range theory, we call this level the CRT high. And the lowest price reached
[01:09] inside the range corresponds to the low of the higher time frame candle. We call this the CRT low. So instead of looking at a candlestick as simply a candle, CRT teaches us to look at it as a complete price range with two important
[01:23] boundaries. CRT high at the top, CRT low at the bottom. And these two levels are extremely important because what price does around them can give us clues about liquidity, market direction, and where price could move next. Now that you
[01:37] understand the CRT range, let's see what happens when price starts interacting candle range theory becomes really interesting. Let's start with the CRT low. Now look at what happens here. Price moves below the CRT low.
[01:53] At first, this looks like a normal bearish breakout. Traders may see the break and immediately start selling, expecting the price to continue lower. But instead of continuing down, price quickly rejects the breakout and moves
[02:05] back inside the CRT range. This is what we call a sell-side liquidity sweep. Price traded below the CRT low, took the liquidity sitting below the range, but failed to stay there. And that rejection is important because according to candle
[02:20] has been swept and price moves back opposite side of the range. In this case, the CRT low was swept. So our next potential objective becomes the CRT high. The opposite happens in a bearish
[02:35] setup. Price first moves above the CRT high. This may look like a bullish breakout, but instead of continuing higher, price rejects the move and falls back inside the range. This creates a buy-side liquidity sweep. Now that
[02:49] liquidity above the CRT high has been taken, we start looking for price to move toward the opposite side of the range, the CRT low. So the basic idea behind CRT is actually very simple. When price sweeps the CRT low and rejects it,
[03:02] we look for a potential move toward the CRT high. And when price sweeps the CRT high and rejects it, we look for a potential move toward the CRT low. This movement from one side of the candle range toward the other is the
[03:15] foundation of the CRT trading model. The CRT range that we see on a higher time frame forms the power of three pattern on a lower time frame. So what is the The power of three is a smart money trading pattern that segments price
[03:29] action into three key phases: consolidation, manipulation, and acceleration. So, how do we actually combine candle range theory and the power of three to find a trade? Here we're looking at the British pound
[03:42] against the Japanese yen on the 1-hour chart. As you can see, the market was moving sideways, and then we got this strong bearish candle. This candle is going to define our CRT range. We simply mark the high of the candle,
[03:55] which becomes our CRT high, and then the low, which becomes our CRT low. Once the range is established, we don't enter immediately. We simply wait and watch how price reacts around these two levels. Now, look at what happens with
[04:09] the next candle. Price breaks below the CRT low, but instead of continuing lower, it rejects the breakout and closes back inside the CRT range. This is exactly what we're looking for. Price has swept the liquidity below the
[04:22] CRT low and moved back inside the range, giving us a potential bullish CRT setup. Now, we switch from the 1-hour chart to the 15-minute time frame to see what actually happened inside this move. And here, we can clearly see the power of
[04:35] three developing. First, price moves sideways and forms accumulation phase, the first stage of the power of three. Then, look at what happens next. Price breaks below the consolidation, takes the liquidity
[04:49] sitting below the lows, and then clearly moves back above. This is the manipulation phase, the second stage of the power of three. Once the manipulation is complete, we can start looking for our long entry. We can place
[05:01] our entry at the close of the candle that confirms the manipulation, with our stop loss below the low of the manipulation, and our target at the CRT high on the 1-hour chart. Now, look at what happens next.
[05:17] This is the distribution phase, the final stage of the power of three. And as you can see, price eventually moves toward our CRT high, hitting our target as expected. So, notice how everything comes together. The 1-hour chart gives
[05:31] us the CRT range and our target, while the 15-minute chart reveals the power of three and helps us find a more precise entry after the manipulation phase. Now, let's look at another chart example. This time, we're looking at gold against
[05:44] the US dollar on the 1-hour chart. As you can see here, we have this strong bullish candle. This becomes our CRT candle. We mark the high of the candle, which becomes our CRT high, and the low, which becomes our CRT low. Once the
[05:58] range is established, we simply wait and see how price reacts around these two Now, look at the next candle. Price breaks above the CRT high, but instead of continuing higher, it rejects the breakout and closes back inside the CRT
[06:12] looking for. Price has swept the liquidity above the CRT high and moved back inside the range, giving us a potential bearish CRT 15-minute chart to see what happened on
[06:26] the lower time frame and look for an entry. As you can see here, price first forms a consolidation. This is the accumulation phase of the the range and takes the liquidity sitting above the highs. This is the
[06:39] manipulation phase. After taking that liquidity, price rejects the move and comes back inside the range. This gives us our opportunity to enter the trade. the candle that confirms the manipulation, with our stop loss above
[06:54] the high of the manipulation, and our target at the CRT low on the one-hour target at the CRT low on the one-hour chart. Now, look at what happens next. of the power of three. And as you can see, the market reaches
[07:10] our CRT low target and then continues moving even lower. Now, trading CRT alone can work, but as traders, we don't want to take every setup we see. We want to focus on A+ setups. And one of the best ways to do that is
[07:25] to look for CRT setups that form at key institutional areas. For a bearish CRT, we want to see the setup forming at a supply zone. And for a bullish CRT, we want to see it forming at a demand zone. This gives us additional confluence and
[07:40] helps us filter out lower quality setups. Now, let's look at some real chart examples and see exactly how this works. Look at this chart example. This is the New Zealand dollar against the US dollar on the daily chart.
[07:53] move down, followed by a short consolidation, and then another strong move down. This creates what we call a drop base drop supply zone. So, let's mark the supply zone on the chart. This area is important because it represents
[08:08] a price level where strong selling pressure previously entered the market. going to watch closely for signs that sellers are stepping back into the sellers are stepping back into the market. Now, look at what happens next.
[08:21] Price comes back and retests our supply zone. And right inside the zone, we get a CRT setup. Here is our CRT candle. We mark the CRT high and the CRT low. Now, watch the second candle. Price breaks above the CRT high, but
[08:35] fails to continue higher and closes back inside the CRT range. Now, we have two important pieces of information coming together. First, price is trading inside a daily supply zone, where we're already interested in looking for potential
[08:48] selling opportunities. And second, price has swept the CRT high and closed back inside the range, giving us a potential bearish CRT setup. This is what we call confluence. Instead of trading the CRT pattern by itself, we're
[09:02] combining it with an important area on the chart that already supports our bearish idea. Now, because we identified our CRT setup on the daily chart, we're going to drop down to the 1-hour time frame to look for our entry. Let's see
[09:15] Here is our daily supply zone. Here we have the CRT high, and down here we have the CRT low. Now, look closely at the price action inside the supply zone. First, price forms a consolidation. This is our accumulation phase.
[09:30] Then price moves above the range, takes the liquidity sitting above the highs, and rejects the move. This is our manipulation phase. Once price closes back inside the CRT range, we have our confirmation to look for a short
[09:43] close of the candle that confirms the manipulation. Our stop loss goes above the supply zone and the high of the manipulation. And our target is the daily CRT low, the opposite side of our candle range. Now look at what happens
[09:58] candle range. Now look at what happens next. of three. And as you can see, the market continues
[10:12] lower and eventually reaches our CRT low target as expected. So, the important lesson from this example is that we don't have to trade every CRT setup we see. When a CRT setup forms at an important area such as a supply zone, we
[10:26] have additional confluence supporting the trade. And this can help us focus on the higher quality CRT setups instead of trying to trade every candle range that appears on the chart. Now, let's look at another chart example. This is the
[10:39] Australian dollar against the US dollar on the one-hour chart. As you can see here, we have a clear demand zone. But before we draw the zone, let's quickly evaluate its quality, just as we've done in previous videos. First, look at the
[10:52] move away from the area. The candles are large and strong, which shows aggressive buying pressure. The move away is also fast and clean, and price was strong level. These are all signs of a high-quality demand zone. Now, let's
[11:07] draw the zone. We identify the base where the strong bullish move started and mark our demand zone around this area. This tells us that strong buying pressure entered the market from this level. So, if price
[11:19] comes back to retest the zone, we're going to watch closely for signs that buyers are stepping back into the market. Now look at what happens next. Price comes back and reaches our demand zone. And right at the zone, we get a
[11:32] CRT setup. Here is our CRT candle. We mark the CRT high and the CRT low. Now, look at the second candle. Price breaks below the CRT low, but instead of continuing lower, it gets rejected from the demand zone and closes
[11:46] back inside the CRT range. This is exactly the type of setup we're looking for. We now have two important pieces of confluence. First, price has reached a strong demand zone where we're already looking for
[11:59] potential buying opportunities. And second, price has swept the CRT low and closed back inside the range, giving us a potential bullish CRT setup. So now, let's drop down to our lower time frame. Because we identified the CRT setup on
[12:14] the 1-hour chart, we're going to use the 15-minute chart to look for our entry. And look at what we have here. The CRT high and CRT low define our higher time frame range. Inside that range, price first
[12:27] accumulation phase of the power of three. Then price breaks below the CRT low and trades into our demand zone, but the breakout fails. Price gets rejected from the demand zone and then closes back inside the CRT range.
[12:42] This is our manipulation phase. Now, we have both the lower time frame manipulation and the higher time frame demand zone supporting the same bullish idea. So we can start planning our trade. We place our entry at the close
[12:54] of the candle that moves back inside the CRT range. zone, and there's an important reason why I prefer this stop loss placement. completely through the demand zone, we're not only seeing the CRT setup
[13:09] fail, but we're also seeing the demand zone fail. In other words, the two main no longer be valid. That's why placing the stop below the demand zone gives the trade a clear invalidation point. Finally, our target
[13:24] is the CRT high, the opposite side of the higher time frame range. Now, look the higher time frame range. Now, look at what happens next.
[13:37] CRT high, and hits our target as expected. So, once again, notice the confluence. We have a high-quality demand zone. We have a sell-side liquidity sweep below the CRT low. We have the power of three developing on
[13:50] And all three are pointing toward the same bullish idea. But, remember, candle range theory is not a holy grail. Even when you have strong confluence, no setup is guaranteed to work. That's why you should always use a stop
[14:04] loss, proper position sizing, and disciplined risk management to protect your capital. If you found this video helpful, make sure to like the video, subscribe to the channel, and turn on notifications so you don't miss the next
[14:16] Thanks for watching, and I'll see you in the next video.