Thread by @SpeculatorFL

One of the best time based CRT models: The 3 AM Model.

- HTF bias and draw on liquidity.
- LTF entry technique.
- Trade management.
- Risk management.

Full Thread. 🧵

Every trading model must have these essential aspects to be considered a proper model.

- HTF Bias.
- HTD Draw on liquidity.
- LTF entries.
- Stoploss and targets.
- Trade management.
- Risk management.

The 3 AM Model has all of these aspects to it.

Timeframe alignment:

a) HTF = H4
b) LTF = M5

Time alignment:

a) HTF CRT = 5 PM and 9 PM
b) LTF Purge = 3 AM to 4 AM.

Draw on liquidity and Bias:

For this trade model, you will determine your bias and draw on liquidity by waiting for the 5 PM or 9 PM H4 CRT to be purged at 3:00 - 4:00 AM. Once purged, your bias will be in the counter direction of the purge. Similarly, your draw on liquidity will be the opposing 50% of the range and the opposing end of the range.

For example, if the high of a 5 PM CRT is purged at 3 AM, then your bias becomes bearish and your draw on liquidity becomes the opposing end of the range.

Important rules:

- The purge has to happen during 03:00 - 04:00 AM. (If the purge happens outside this time window then you don't take any trade and wait for another day)
- You must wait for a LTF CSD to occur on the LTF before confirming your bias and draw on liquidity. (If there is no CSD on the LTF then you won't be taking any trade.)
- CSD confirms your bias and if there is no CSD then no trade.
- Let me say it again, the purge has to happen at (03:00 - 04:00) otherwise no trade.
- Note and journal all of these rules.

This is how you determine your draw on liquidity and bias.

WARNING - MUST READ THIS:

This is the simplest way to determine your bias and draw on liquidity.

Let me tell you that you should only use these mechanical rules if you're a beginner. If you're an advanced or intermediate student, you must also integrate other concepts and profiles with it.

This method is just for beginners to build some basics around determining bias and draw on liquidity.

You could use the daily bias concept to determine your bias and draw on liquidity.

LTF Entry:

For your LTF entry, you must first follow all of the HTF rules. Once those rules are being followed, you then move to the LTF to look for your entry, adhering to the following guidelines:

- Purge Timing: The purge must happen at the 3 AM candle.

Entry:

- After the purge, wait for a CSD to occur.
Take the entry at the order block formed.

Stop Loss:

- Place the stop loss above/below the swing formed respectively. For instance, if a high has been taken and a CSD occurs, your stop loss will be placed above the swing high formed after the CSD.

Target:

- Aim for 50% of the range and the opposing end of the range.

Here are some examples to reverse engineer.

Look and see whether this trade follows all the rules or not and then decide whether you would've taken this trade or not.

You can see in this example the purge happened outside our preferred time window, that's why this wasn't a correct trade and you wouldn't have taken it.

Important Points:

Building Your Entry Model: Your entry model and system must incorporate all these aspects. This is one of the models I use to find trades, but as mentioned before, I also integrate other profiles and concepts to accurately determine my bias and draw on liquidity.

HTF Approach for Beginners: The HTF approach is highly recommended for beginners to build their basics and fundamentals in determining their bias and draw on liquidity.

Intermediate and Advanced Students: If you're an intermediate or advanced student, you can still use the HTF approach, but ensure you add other profiles and concepts to increase your accuracy and precision even more.

Fundamental Rules: You can make adjustments, but you cannot change the fundamental rules, such as the purge must happen at the 3 AM candle.

Backtesting and Journaling: Backtest this as much as you can and journal each of your entries and trades.

Educational Purposes: None of this is financial advice; it is all for educational purposes.

Winrate and Profitability: This strategy offers at least a 50-60% win rate with an average 3RR, which is enough to make you heavily profitable.

Long-term Profitability: Like any other strategy or model, it will have its losses, but in the long run, it will offer you money and profits.

Enjoy using this model!

If you prefer learning through video-form then I've made a detailed video about it too.



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