Framework

CRT Framework

The Candle Range Theory (CRT) Model is an advanced trading framework designed to programmatically detect, visualize, and invalidate key market concepts such as Sweeps, CISD (Change In State of Delivery), Projections, Liquidity, and more.

By integrating various components, this model provides a comprehensive view of the market, enabling traders to identify optimal entry and exit points.

Lifecycle Statuses

The CRT Model operates through a defined lifecycle that outlines its current state and determines whether a trade opportunity is valid.

The lifecycle includes the following phases:

• Formation

• Invalidation

• Success

1. Formation

The Formation phase marks the initiation of the CRT Model. During this stage, the model identifies and plots critical components like:

• Sweeps: Market movements signaling potential trend reversals or shifts.

• CISD (Change In State of Delivery): Structural changes that reveal potential trend shifts.

Once these components are detected, the model calculates and visualizes Projections and Liquidity Levels, providing insights into future price action.

2. Invalidation

The CRT Model is considered invalid when the price fails to meet key conditions, signaling that the initial setup is no longer reliable.

Invalidation occurs when:

• The price fails to reach the 2 Standard Deviation level.

• The price fails to reach the first identified liquidity level.

• The price breaks above the high that initiated the Sweep.

When invalidated, the original trade setup is no longer valid, and traders should refrain from acting on it.

3. Success

The CRT Model is deemed successful when the price meets one of the following criteria:

• The price reaches the 2 Standard Deviation level.

• The price reaches the first identified liquidity level.

When success is achieved, the model's predictions align with market movements, confirming the validity of the trade setup and providing a potential signal to execute a trade.

By understanding the phases of Formation, Invalidation, and Success, traders can effectively manage their positions, reduce risk, and take advantage of high-probability setups that the CRT Model identifies.

When to Enter a Trade

After the CRT Model completes its Formation phase and key components like Sweep and CISD are detected, traders should wait for additional technical signals before entering a trade. Here’s a breakdown of entry strategies:

1. Entry Using CISD

The best entry signal comes from the CISD. When the CISD aligns with the model's structure, it acts as an entry point, suggesting the market will likely follow the predicted path.

• Action: Look for a CISD that aligns with the broader model and price structure.

• Entry: Enter near the CISD zone, setting a stop loss based on the model's invalidation rules.

2. Missed Entries: First C-Area Level

If a trader misses the initial entry at the CISD or LTF PD Array, the next best entry opportunity comes at the first C-Area level. The C-Area represents a key zone where price action may consolidate. Traders should look for volume confirmation and ensure no divergences exist to validate the entry.

• Action: Wait for price to reach the first C-Area level, ensuring consolidation and strong volume.

• Confirmation: Check for the absence of divergences (e.g., no conflicting bullish or bearish divergences).

• Entry: If the above conditions are met, enter near the C-Area zone with a stop loss placed at the end of the zone.

By utilizing these entry strategies and leveraging the CRT Model's lifecycle phases, traders can better manage their trades, minimize risk, and enhance their decision-making process based on reliable market signals.