How to Trade Candle Range Theory in Forex Market. CRT ICT Strategy Explained
- VasilyTrader
- 2 hours ago
- 4 min read
Today, I will show you an example of trading Candle Range Theory CRT with multiple time frame analysis strategy on Forex market.
I will teach you my trading strategy step by step, and share an effective price model that you can use for trading any forex pair.
Read carefully and learn to trade CRT ICT.
Strategy Time Frames
For trading this strategy, we will use two time frames:
4 hour time frame,
1 hour time frame.
4H Time Frame Analysis Buy Model
We will start our analysis strictly with the 4 hour time frame.
On a 4 hour time frame, we will look for a strong bearish candle.
Such a candle should have a strong, big body in comparison to average candles on a 4 hour time frame.
We will use such a candle for CRT trading.
The most important elements of this candle will be its low and the candle opening level.
From the low of this 4 hour candle, we will look for buying, expecting a bullish movement to the level of the candle opening.
1H Time Frame Analysis Buy Model
After we identified a strong bearish candle on a 4 hour time frame, we should start analyzing an hourly time frame.
And by the way, make sure that this 4 hour candle closes. It should strictly close before we start looking for any signal.
On an hourly time frame, our strong bearish candle will be a sequence of four hourly candles.
The first thing that you should look for in an hourly time frame is a liquidity grab below the low of our 4 hour strong bear candle.
And the second thing that we should look for is a test of a significant liquidity demand zone.
The ideal scenario that you should look for is a start of consolidation and sideways price action on an hourly time frame after a test of a liquidity demand zone and a trap.
Such a consolidation will signify an accumulation of buying volumes.
Your strong signal to buy will be a confirmed bullish change of character.
You will need to simply identify the level of the last lower high on an hourly time frame and wait for its bullish breakout and an hourly candle close above.
That will be a strong bullish signal, and it will signify a highly probable bullish continuation to our 4 hour candle opening level.
Buy Trade Execution Strategy
To execute the trade properly, I suggest
setting your buy limit order on the level of the last lower high on an hourly time frame,
stop loss should strictly lie below the lows,
take profit will be 4H candle opening level.
So you are buying after a pullback and expect a rise to the top of a 4H range.
And by the way, while most of the CRT traders aim at the high of a 4hour candle based on the wick, aiming at the 4 hour candle opening level will bring you a higher win rate.
CRT Trading Example
Let me show you an example of trading this price model.
We are NZDUSD forex pair on a 4 hour time frame and we see a strong 4 hour bearish candle.
This 4 hour bearish candle has a big body, and once it closes, we will need to underline its opening level and its low.
After that, we should start analyzing an hourly time frame.
On an hourly time frame, we can easily see the range that we will trade.
It is based on the opening of our 4 hour candle, and its low.
We got a confirmed trap, liquidity grab below that, and a test of a liquidity demand zone.
So all the conditions are met.
The pair started to consolidate, indicating a bullish accumulation.
Our signal to buy NZDUSD is a confirmed bullish change of character. To confirm that, we will need an hourly candle to close above the level of the last lower high on 1H.
When an hourly candle closes above that, we
set our buy limit order on a retest of that price level,
set our stop loss below the lows of a bearish trap,
our take profit is be based on the 4 hour opening level.
That is a very simple plan to follow, and the price nicely reached the target then.
4H Time Frame Analysis Sell Model
Now let's discuss the bearish model.
On a 4 hour time frame, you should look for a strong bullish candle with a large body.
Once such a candle closes, start analyzing an hourly time frame.
1H Time Frame Analysis Sell Model
On an hourly time frame, our 4 hour bullish candle will be a sequence of 4 hourly candles.
After that, your ideal case scenario is a consolidation and accumulation.
The market should start coiling, and we should look for a liquidity grab above the high of our strong 4 hour candle first.
The second condition is a test of an important liquidity supply zone.
Our signal to sell will be a bearish change of character and a violation of the level of the last higher low.
Once a violation is confirmed and an hourly candle closes below that level, we can sell and anticipate a bearish movement to a 4 hour candle opening level.
Sell Trade Execution Strategy
Set your sell limit order on a retest of a broken higher low level.
Stop loss should lie above the highs.
Your take profit will be 4H candle opening level.
And again, instead of aiming at the low of a 4 hour candle, we are aiming at the opening level. By doing so, we will increase our win rate dramatically.
Using this strategy, you can trade CRT Candle Range Theory on any forex pair. Follow the plan. Make sure that all the conditions are met, and good luck to you in trading forex with ICT.
