Lesson 17R-017Cheat sheetCRT equilibrium

CRT 50% Bias

In Candle Range Theory every candle is a range: its high and low are two pools of liquidity. The 50% of the range candle is its equilibrium. Price holding above the 50% is a bullish lean, holding below it is a bearish lean.

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CRT 50% Bias cheat sheet — page 1
CRT 50% Bias cheat sheet — page 2

Lesson notes

The rules

  1. Range candle: mark its high, its low and its 50% (high + low, divided by 2).
  2. Above the 50%: bullish lean. Favor longs and the range high.
  3. Below the 50%: bearish lean. Favor shorts and the range low.
  4. Bias needs a hold: a wick through the 50% is not a flip; closes and a held retest are.
  5. First target: from either side of the range, the 50% comes first. Take partials or tighten there.
  6. Final target: the opposite side of the range, where the other pool of liquidity sits.

How to mark it

  1. Pick the range candle on your higher timeframe (Daily for 4H, 4H for 15m).
  2. Mark the high, the low and the 50%.
  3. Note which side of the 50% price is holding: that is the lean.
  4. Take the setup at one extreme (a dip under the low that closes back inside).
  5. Treat the 50% as the first target; hold for the far side only once price holds beyond it.

The 1:3 trade

Entry on the close back inside the range. Stop below the wick. First target the 50%, final target the range high. Reward to the final target is exactly three times the risk.

Before you enter

  • Range candle high, low and 50% are marked
  • You know which side of the 50% price is holding
  • The entry comes from an extreme of the range
  • The 50% is planned as the first target
  • The final target is the opposite side of the range

Common mistakes

  • Calling a bias from a single wick through the 50%
  • Buying above the 50% with no room left to the high
  • Ignoring the 50% and expecting a straight run to the far side
  • Using a range candle from the wrong timeframe pairing
  • Keeping the old lean after price has held on the other side

Key terms

  • Range candle: the candle whose high and low frame the setup
  • 50% / equilibrium: the midpoint of the range candle
  • Bullish lean: price holding above the 50%
  • Bearish lean: price holding below the 50%
  • First target: the 50%, the checkpoint before the far side
  • R:R: reward divided by risk; 1:3 means 3R for 1R risked
Above half, lean long. Below, lean short. The 50% comes first.