Understanding CRT Trading Strategy

Chance that the market will rally up to seek liquidity nested above the candle

range high.

Point to note.

We don't mark any random candle in the market and apply this strategy.

However, we follow strict rules and conditions for this model to work.

We shall break down the conditions step by step in this episode.

Once we have identified the candle range high and low, we zoom down to the

lower timeframe for trade opportunities and entry confirmations.

Let's look at examples.

Here we have a daily candle.

We wait for either side of the range to be swept.

As you can see, price swept the high and closed below it.

Now that the CRT high has been swept, we anticipate that the

price will seek for a sweep of the CRT low.

We now drop to the one-hour chart.

Here, we can see a break of this recent

structure low, creating a

market structure shift.

Now, the question is: where do we sell at?

Applying smart money concepts, we can see this fair value gap

which acts as a magnet to price.

We place our sell limit at the fifty percent of the fair value gap,

stop loss above the swing high, and target below the candle range low.

As you can see, price expands lower as anticipated

and hits our

target.

Before we look at a bullish scenario,

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Let's get back to the charts.

First of all, we can see that price swept the recent structure low

and

sharply reversed to the upside, closing within the range.

With the first condition met, we head down to the lower timeframe for

signs

of reversal and entry confirmations targeting the CRT high.

On the fifteen minutes chart, the sweep of liquidity

is evident leading to the

break of the recent structure high.

Additionally, the bulls confirmed their buying momentum

by breaking this other

structure.

To add to our confluence, price is retesting the fair value gap.

So, we take our buy position here, stop loss just below the

recent structure low, and take profit above the candle range

high.

As you can see, take profit got hit.

If you trade the CRT alone without the following conditions, then you

will definitely fail.

Let's look at the rules and conditions to optimize the CRT trading

model.

First, identify the higher timeframe direction.

You should then wait for a pullback in the opposite direction at a point of

interest.

Price should then sweep the candle range low or high.

The intended direction of the trade should align with the higher timeframe trend

direction.

The sweep should also happen at a point of interest for a high probability set

up.

Additionally, a market structure shift must form in the

lower timeframe to

validate the set up.

Let's combine these conditions in a real chart example.

Here, we can see that the market is in an uptrend breaking structure highs.

Price then created this bullish order block with a fair value gap.

So, we have this level marked as our point of

interest.

Looking closely at the chart, we can mark this candle's high

and low as it

retesting the point of interest.

Now, price has swept the candle low and bounced from the order block.

The next pool of liquidity that we expect the price to sweep

is the candle range

high.

We can then scale down to the lower timeframe and look for a buy opportunity.

Here in the lower timeframe, price broke structure high after the sweep

of

liquidity forming a market structure shift.

The next thing to note is this bullish fair value gap

which price must respect

if it has to expand higher.

So, we can set our entry at the fair value

gap.

Our stop loss goes just below the CRT low, and our take

profits is set at the CRT high.

And as you can see, price expanded aggressively to the upside

hitting

our take profit.

So, you can see that the CRT trading strategy

is a powerful

tool i Trading.

However, in addition to the rules and conditions we have just discussed,

timeframe alignment is key if you want to achieve great results.

The best time frame alignment for better accuracy is as follows.

Weekly CRT.

Take your entry on the four-hour chart.

Daily CRT.

Take your entry on the one-hour chart.

Four-hour CRT.

Take your entry on the fifteen minutes chart.

One hour CRT.

Take your entry on the five-minute time frame.

Any CRT on any time frame lower that fifteen minutes may not

yield better results as you will often face stop outs.

You can also combine the CRT model with other smart money concepts

for more accuracy and confluence.

I will dive deeper into more confluences in my upcoming video, so check it

out soon.

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