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Candle Range Theory (CRT)

ICT / Price action · Timeframe: H4 (also daily / H1) · Sessions: H4 candles at 1:00, 5:00 and 9:00 NY

One candle defines a range; the next sweeps one end and closes back inside → price travels to the opposite end.

How it works

CRT treats every higher-timeframe candle as a range with liquidity at its high and low. Three-candle pattern: candle 1 sets the range; candle 2 sweeps the liquidity at one end (turtle soup) but closes back inside the range; candle 3 is the distribution candle that seeks the opposite end of candle 1. It is the 'higher-timeframe candle' version of PO3: candle 2 is the manipulation. It works especially well on H4 aligned with the daily bias, and on the 1:00/5:00/9:00 NY candles.

Step-by-step rules

  1. Identify candle 1 (the range) on H4 with a meaningful size.
  2. Candle 2 trades above the high (or below the low) of candle 1 and CLOSES back inside its range.
  3. Entry at the close of candle 2 (or at an M15 FVG/OB inside it).
  4. Stop: beyond the extreme of candle 2.
  5. Target: the opposite end of candle 1 (with a partial at the 50% of the range).

How Marketalyx tests it

Detector: H4 candles (NY). Candle 2 sweeps one end of candle 1 and closes inside; entry at the close, stop at candle 2's wick, target the opposite end of candle 1.

See real cases on gold and forex →

Educational content. No strategy guarantees profits and past performance does not guarantee future results.