Candle Range Theory (CRT) is a price action trading concept that analyses the range of a candlestick to identify potential market manipulation and future price direction. The theory is based on the idea that institutional traders and market makers often move prices in a predictable sequence to capture liquidity before driving the market toward their intended target.

In CRT, a candle's range is defined as the distance between its high and low. Traders study how price behaves within and around this range to determine whether the market is accumulating orders, manipulating participants, or distributing price toward a new direction. The theory is commonly broken into three phases: Accumulation, Manipulation, and Distribution (AMD).

During the accumulation phase, price consolidates within a defined range. The manipulation phase occurs when price briefly moves beyond a significant high or low, creating a false breakout or liquidity sweep. This move is designed to trigger stop-loss orders and entice traders into incorrect positions. Finally, the distribution phase begins as price reverses and moves toward the intended target, often producing a strong directional trend.

CRT is widely used in forex, stocks, indices, and cryptocurrency markets. Traders often combine it with liquidity analysis, market structure, support and resistance levels, order blocks, and fair value gaps to improve trade accuracy. By understanding how candle ranges reveal institutional behaviour, traders can identify high-probability entry points, place more effective stop losses, and improve their overall market timing. As a result, Candle Range Theory has become a valuable tool for modern price action and smart money traders.