CRT trading: Candle Range Theory and Turtle Soup, with rules and data

CRT (Candle Range Theory) is a sweep-and-return pattern. A reference candle sets a high and a low. The next candle takes out one of those extremes, leaves the other untouched and closes back inside. From there you look for the 50% of the range and then the opposite extreme.

At its core, it is the Turtle Soup of Connors and Raschke (1995) applied to the range of one specific candle, almost always a 4-hour candle. Futures have one detail that changes everything: CME 4h candles do not open at the same time as the ones the forex community uses.

In this guide you will see how to mark a CRT step by step, the systems that have written rules, the most repeated mistakes, what the few existing studies say and how to adapt it to a prop firm account. One warning: there is no accessible primary material from the creator of the method, so what follows is the most-cited version, not the canonical one.

Free tool: if you use NinjaTrader 8, you can download the CRT indicator we built at El Trader Financiado for the community. See the indicator and download it.

What is CRT (Candle Range Theory)

The descriptions of public scripts attribute the method to @Romeotpt, on X. The original name they cite is "Candles Are Ranges Theory", and the author calls the reversal that follows the sweep "turtle soup".

In the most widespread version of the method, the definition is this:

• Candle 1 (parent or reference): sets the range with its high and its low.
• Candle 2: sweeps one side without sweeping the other and closes inside the range of candle 1.
• Bearish CRT: candle 2 takes out the high and closes inside. The bullish one is the mirror image.
• Targets: first the 50% of the range; then, the opposite extreme.

It is usually read as a sequence of accumulation, manipulation and distribution. Candle 1 is the range (accumulation), the wick that pokes outside is the false move (manipulation) and the run to the other extreme is the real move (distribution). This reading comes from the method's author and the people who spread it. It is not a measured fact.

CRT and Turtle Soup: are they the same?

They share the idea, but not the rules. The original Turtle Soup, published in Street Smarts (1995), is a mechanical, daily, counter-trend rule on 20-day extremes. The ICT version and the CRT version apply to "any previous high or low" and usually ask for structure confirmation.

Taking the 1995 rule to 4h candles or 5-minute charts is an extrapolation. There is no published evidence that it works the same way on those timeframes.

How to mark a CRT step by step

1. Pick the right 4-hour candle

CRT communities use the 4h candles that open at 01:00, 05:00 and 09:00 New York time. That is the forex grid.

On CME futures the session opens at 18:00 New York time, so the native 240-minute candle falls in a different phase. On CME indices, 4h candles open at 02:00, 06:00 and 10:00 New York time.

Many sources use one or the other without saying so. Decide which one you use and do not mix them.

2. Set the bias on the higher timeframe

The most common timeframe pairs are these:

3. Require a key level

The method's own sources point to the lack of a key level as the main cause of failure: an isolated CRT is not enough. The accepted levels are previous highs and lows, order blocks and fair value gaps.

4. Check the sweep

Candle 2 must sweep one side only and close inside. Rule out two cases:

• Inside candle: it sweeps nothing. It is not a CRT.
• Engulfing candle that sweeps both sides: scripts exclude it or treat it separately as a "double purge".

5. Look for the trigger on the lower timeframe

CRT scripts list three entry models:

• Model #1: a full candle closes beyond the previous one and you enter at that close. It is the fast version.
• CISD: the open level of the last directional leg breaks and you enter on the break.
• MSS + FVG: a change of structure with displacement and an entry in the fair value gap it leaves.

6. Define stop, targets and invalidation

The stop goes beyond the swept extreme or, in the tighter version, at the swing that creates the MSS. Target 1 at the 50% of the range and target 2 at the opposite extreme. If price takes out the extreme of the sweep, the CRT is invalidated.

CRT and Turtle Soup systems with rules

These are the systems that have written rules in the sources. None of them is "the official method".

The Turtle Soup rules are those from Street Smarts; the mechanical 1h version comes from a backtest published by an automation tool vendor, unaudited. Sells are the mirror image of buys.

There are discrepancies between sources: the base version asks for the previous extreme to be 4 sessions old or more and the Plus One talks about 3 days. The logic of Plus One is that many people enter on the breakout day at the close, and that traps more traders. The "reference CRT" is a synthesis of what scripts repeat, not the rule of any specific author.

A warning about the widely shared "4H CRT 1AM/5AM" strategy: it marks the range of the 01:00 candle and waits for a 15-minute MSS if the 05:00 candle sweeps. But it does not define a stop, a target or a time zone. Without those three things it is not a system.

Common CRT mistakes

• Mixing up 1-5-9 and 2-6-10. On NQ, ES, CL or GC, the CME 4h candle does not match the forex one. If you mix the two, you mark different ranges.
• Trading without a key level. It is the failure the method's own sources point to the most.
• Taking an engulfing candle for a CRT. If the candle sweeps both sides, there is no clear "false" side.
• Choosing a candle 1 with a big body. In the only large study (published on TradingView, no external review), a "conviction" candle 1 worsens the result by 0.6 to 4.2 points, and a doji-type candle 1 improves it by 0.9 to 2.7.
• Entering before candle 2 closes. Until it closes, the sweep can turn into a breakout. A provisional CRT is not a CRT.
• Placing the stop at the 4h extreme without calculating it in dollars. On NQ it can be a number that does not fit your account (more on that below).

What to combine CRT with

CRT asks for a level and a trigger. Those pieces have their own guides:

• Levels and times: previous day highs and lows, the Asia range (20:00–00:00 NY) and killzones. You have it in ICT killzones and in the session levels indicator.
• Trigger: MSS and order blocks are explained in order block and market structure. The entry gap, in fair value gap.
• Cross-asset confirmation: a 4h candle that sweeps on NQ but not on ES is the cross-asset version of the same argument. It is an SMT divergence.

A counterintuitive data point: in that same study, adding multi-timeframe confluence lowered the win rate to 28-32.5%, even though it reduced risk. The best-performing filter was a 9 EMA in the direction of the trend (+2.9 to +6.6 percentage points), at the cost of discarding 60-65% of trades. "More confluences, better" did not hold in the only large test that exists.

What the evidence says about CRT

There is little, and it is not favorable.

• CRT without filters: a study published on TradingView, without external review (gold 2009-2019 and EUR/USD 2000-2021, from 1 minute to daily) measures how often price reaches the opposite extreme before the stop. It comes out between 42.8% and 49.0%. The author describes it as "very similar to flipping a coin". It does not analyze the reward/risk ratio or costs.
• Original Turtle Soup: tested on 42 US futures between 1980 and 2011, with and without costs, it gets a grade of "D" (poor) (Oxford Capital Strategies). Some of the people who spread it acknowledge that the edge has degraded and depends on the market regime.

An honest caveat: since the sweep wick is usually shorter than the range, the reward/risk ratio tends to be greater than 1. That is why a "coin-flip" win rate does not by itself imply zero expectancy. But nobody has measured it net of costs with a large sample on futures. What the people spreading the method claim about its effectiveness is not proven.

How CRT fits a prop firm

In a funded account the problem with CRT is not the pattern. It is the size of the stop.

Calculate the stop in dollars before entering. With the stop at the swept extreme of a 4h candle, the distance can be large. An example with a 60-point stop on NQ and a 15-point stop on ES:

With a daily loss limit of, say, $1,000, a single NQ stop no longer fits, and an ES stop eats 75% of the day. In a backtest published by an automation tool vendor (unaudited), even with 1h candles and one contract, the maximum drawdown on NQ over two months was $5,722.50. That exceeds the typical limit of a 50K account.

Duration and news. In the study published on TradingView, 86-92% of setups resolve within three candles. On 4h, that is up to about 12 hours of trading: it can cross the 08:30 New York data releases or the daily close. Many prop firms restrict trading around news such as CPI or NFP; check the rules of yours.

Consistency. A system with a win rate near 50% and a distant target concentrates profit in a few good days. That clashes with consistency rules that limit the weight of the best day.

A logical adaptation (it is our own judgment, it does not come from any source):

1. Use the 4h candle only as bias.
2. Put the stop at the 5-15 minute MSS swing, not at the 4h extreme.
3. Trade micros (MNQ, MES) until the stop fits with room to spare.
4. Avoid the 06:00–10:00 NY candle, which contains the 08:30 release.
5. Close before 16:00 CT if your firm does not allow holding positions.

If you want to compare daily loss limits across firms, you have the prop firm comparator.

Free NinjaTrader indicator

We built a CRT indicator for NinjaTrader 8 that draws the 4h candles aligned to CME (2-6-10) or to 1-5-9, marks each sweep with its 50% and tracks whether the target is hit or invalidated. It is free, built by El Trader Financiado for the community and available in English and Spanish. Download it and see its settings on the CRT indicator for NinjaTrader page.

CRT trading FAQ

What is CRT in trading?

It is Candle Range Theory: a reference candle sets a range, the next one sweeps an extreme and closes inside, and the target is the 50% of the range and then the opposite extreme. It is attributed to @Romeotpt.

Which 4-hour candles should I use for CRT?

In forex, the 01:00, 05:00 and 09:00 New York ones are used. On CME futures, the native 4h candle falls at 02:00, 06:00 and 10:00. Pick one grid and stick to it.

Is CRT the same as Turtle Soup?

Not exactly. The 1995 Turtle Soup is a mechanical rule on 20-day extremes on a daily chart. CRT applies the same sweep-and-reversal idea to the range of one specific candle and adds lower-timeframe confirmation.

Does the CRT strategy work?

There is no proof that it works on its own. Without filters, the pattern reaches the opposite extreme before the stop in 42.8-49.0% of cases in the largest study, and the original Turtle Soup gets a "D" on 42 futures.

Which timeframe do you enter on?

The usual setup is CRT on 4h and entry on 5 or 15 minutes, with an MSS, a CISD or an FVG as the trigger.

What is a double purge?

A candle that sweeps both the high and the low of the previous one and still closes inside. Most scripts do not count it as a CRT.

Keep learning

• The 8 free indicators for NinjaTrader 8
• ICT killzones: times, Silver Bullet and liquidity sweeps
• SMT divergence: how to read the divergence between NQ and ES
• Fair value gap: what it is and how to trade it
• Prop firm discounts for futures