Statuses

CRT Model Statuses

The CRT Model operates through a defined lifecycle that outlines its current state and determines whether a trade opportunity is valid.

The lifecycle includes the following phases:

• Formation

• Pre-Invalidation

• Invalidation

• Success

1. Formation

The Formation phase marks the initiation of the CRT Model. During this stage, the model identifies and plots critical components like:

• Sweeps: Market movements signaling potential trend reversals or shifts.

• CISD (Change In State of Delivery): Structural changes that reveal potential trend shifts.

Once these components are detected, the model calculates and visualizes Projections and Liquidity Levels, providing insights into future price action.

2. Pre-Invalidation

A CRT Model is considered pre-invalidated when the body of the subsequent candle closes above the sweep, yet the high that formed the sweep remains intact.

In such cases, the model is typically deemed unreliable, as it suggests a potential failure in most instances.

Despite this, the high from the original sweep continues to hold significance, indicating that the model has not yet been fully invalidated but is on the brink of doing so.

Most of the time, these models do not result in successful outcomes.

3. Invalidation

The CRT Model is considered invalid when the price fails to meet key conditions, signaling that the initial setup is no longer reliable.

Invalidation occurs when:

• The price fails to reach the 2 Standard Deviation level.

• The price fails to reach the first identified liquidity level.

• The price breaks above the high that initiated the Sweep.

When invalidated, the original trade setup is no longer valid, and traders should refrain from acting on it.

4. Success

The CRT Model is deemed successful when the price meets one of the following criteria:

• The price reaches the 2 Standard Deviation level.

• The price reaches the first identified liquidity level.

When success is achieved, the model's predictions align with market movements, confirming the validity of the trade setup and providing a potential signal to execute a trade.

By understanding the phases of Formation, Invalidation, and Success, traders can effectively manage their positions, reduce risk, and take advantage of high-probability setups that the CRT Model identifies.