Overview
This lecture explains the 5 a.m. 4-Hour CRT (Central Range Trading) model, detailing its setup, confirmations, and execution for Forex trading using step-by-step examples.
Introduction to the 5 a.m. 4-Hour CRT Model
- The 5 a.m. 4-hour CRT model is favored for its simplicity and high probability.
- The model centers on marking the high and low of the 5 a.m. 4-hour candle in Forex.
- Patience and confirmation are emphasized for success with this strategy.
Step-by-Step CRT Model Setup
- Mark the high and low of the 5 a.m. 4-hour candle to define your trading range (first confirmation).
- Look for a 15-minute or 1-hour CRT formation within the 5 a.m. range on lower time frames (second confirmation).
- Ensure a liquidity purge occurs between 9:00 a.m. and 10:30 a.m. at one end of the CRT range (third confirmation).
Entry & Execution Strategies
- Standard entry: Enter after the second candle of the 15-minute or 1-hour CRT closes.
- Advanced entry: Use 5-minute, 3-minute, or 1-minute order block for precision.
- Enter at the identified order block, set stop loss above it, and target the opposing CRT low/high.
- Beginners are advised to stick with entries based on the 15-minute or 5-minute charts.
Chart Examples & Additional Confirmations
- On GBPUSD, confirm all three steps: mark 5 a.m. range, identify lower time frame CRT, spot purge in time window.
- Entry is taken when a strong up-close candle (taking out stops) closes below, forming an order block.
- For missed entries, use the third candle’s open and fair value gap (FVG) with a turtle soup entry model.
- Adding a higher time frame key level (e.g., daily high) as a fourth confirmation increases win rate.
Key Terms & Definitions
- CRT (Central Range Trading) — A strategy that trades around a defined price range within a set time period.
- Order Block — A price area where significant orders cluster, often signaling reversals or continuations.
- Liquidity Purge — A quick move to take out stop orders around a key range.
- Fair Value Gap (FVG) — A price gap indicating imbalance, used for entries.
- Turtle Soup Entry Model — A reversal entry strategy after a false breakout.
- EQ (Equilibrium) — The midpoint of the CRT range, used as a partial take-profit target.
Action Items / Next Steps
- Beginners: Watch the detailed CRT introductory video before applying this model.
- Practice marking the 5 a.m. range and identifying CRT formations on different time frames.
- Add higher time frame key levels for confirmation in your own trading analysis.
- Review and rewatch this material to reinforce understanding.