Every Candle Is a Range

The rules

1. Candle 1, the range: mark the high and the low. Both are liquidity.
2. Candle 2, the purge: it trades through ONE side only and its body closes back inside the range.
3. Candle 3, delivery: target the opposite side of the range; its 50% is the halfway reference.
4. Inside bar: candle 2 takes neither side. No setup.
5. Double purge: candle 2 takes both sides. No clean setup, skip it.
6. Location: best at a key level (previous day high or low, a higher-timeframe gap or order block).

How to mark it

1. Pick the timeframe pair: Daily range with 4H execution, or 4H range with 15m or 5m execution.
2. Mark the range candle's high, low and 50%. Extend the lines right.
3. Wait for the next candle to purge one side and close back inside.
4. Confirm on the lower timeframe (market structure shift, gap or order block) if you want a tighter entry.
5. Stop beyond the purge wick, target the other side of the range.

The 1:3 trade

Entry at the purge candle's close, back inside the range. Stop below the purge wick. Target the range candle's high, the pool on the other side. Reward is exactly three times the risk.

Before you enter

• Range candle high and low marked and extended
• Candle 2 took one side only
• Candle 2's body closed back inside the range
• The purge happened at a key level
• Stop beyond the purge wick, target the opposite side

Common mistakes

• Entering while candle 2 is still open, before the close
• Trading an inside bar that never took a side
• Trading a double purge that took both sides
• Taking a purge that closed outside the range (that is a breakout)
• Using 4H key times without checking which session clock your chart uses

Key terms

• CRT: Candle Range Theory: every candle is a range
• Range candle: candle 1, whose high and low are marked
• Purge: candle 2 takes one side and closes back inside
• Key times (4H): 1 AM, 5 AM, 9 AM New York candles; check your chart's session clock
• 50% of the range: midpoint reference: above it bullish, below it bearish
• R:R: reward divided by risk; 1:3 means 3R for 1R risked

One side taken, close back inside, aim for the other side.