Range and liquidity
The reference is yesterday's daily candle range (CRH/CRL), plus the previous day's high and low. One trade a day, maximum — if there is no setup, there simply is no trade that day.
Strategy
CRT Model 1
Candle Range Theory reads every candle as a bounded range: the high and the low are pools of liquidity. Model 1 trades the moment the market collects that liquidity — and turns back.
The principle
A candle isn't a line on a chart, it's a range with edges. Above the daily range high (CRH) sit sellers' stop-losses, below the low (CRL) sit buyers' — the market returns to those levels because that's where tradable liquidity lives. CRT Model 1 waits for an edge of the range to get swept, and trades the return: the expansion to the opposite side. The confluences that turn a valid setup into an A+ setup: SMT divergence with the dollar index, the True Day Open, and the previous day's liquidity (PDH/PDL).
Entry rules
D1 bias
The daily timeframe sets the direction — trades go with the bias, never against it. In the backtest the long side proved by far the most robust; counter-trend trades are a discretionary exception, always logged in the journal.
Trigger: sweep + confirmation
An M15 candle must sweep the liquidity and come back. Its extreme defines the Model 1 level; a following candle closing beyond that level is the confirmation — without it there is no entry, anticipation is forbidden.
Entry: limit at the retest
After confirmation, a limit order goes to the Model 1 level and waits for the retest. Stop-loss beyond the sweep candle's extreme, fixed 3R target. An unfilled limit is cancelled at the end of the entry window; after entry no breakeven, no partials, no moving stops — set & forget.
Risk management
Fixed risk turns results into statistics. At 1:3 RRR a win rate above 25% keeps the model profitable long-term; the backtest on 14 years of GBPUSD data shows ≈36% and +0.24 R per trade across 111 trades, with a −2.1% maximum drawdown at the risk used. And honestly: a t-statistic of ≈ 2 means a hypothesis being confirmed by forward testing — not proof.
- Risk per trade
- 0.5%
- Risk : reward
- 1 : 3
- Trades per day
- max 1
- Backtest expectancy
- +0.24 R/trade
Discipline is part of the model
Every journal entry has a "followed the plan" field. A trade that made money outside the rules counts as a failure in the journal — because it can't be repeated. A model without measured discipline isn't a model, it's a mood.