TheStrat vs ICT, Smart Money Concepts and Candle Range Theory: What Is the Difference?

By Alex Sopa (AlexsOptions) · Updated October 29, 2026

Short answer TheStrat reads every bar as a 1, 2 or 3 against the previous bar, counts the 2s across 4 or more timeframes, and acts only when price trades through an exact price, such as the previous bar’s high. ICT and Smart Money Concepts (SMC) read zones that the trader marks, such as order blocks, fair value gaps and liquidity pools, and public guides call both of them discretionary. Candle Range Theory (CRT) reads the range of one candle: price takes one side, closes back inside, and targets the other side. TheStrat reads the same failed break as a failed 2, a potential 3, while the bar trades, and does not need the close. Rob Smith taught the failed 2 and its target in 2018, and CRT appeared in the ICT and SMC community in the 2020s.

SPY weekly, week of April 21 2025, real data (Alpaca SIP), built from daily bars. The week of April 14 is inside the week of April 7: a 1. On Monday the new week takes the inside week’s low, $520.29: a 2d. On Tuesday it trades back above its own open, $521.16: a 2d trading green, a 2 going 3. On Wednesday it trades through the inside week’s high, $544.28: a 3. On Friday it reaches the magnitude, the high of the week of April 7, $548.62, and closes at $550.64.

The four methods side by side

TheStrat, ICT, SMC and CRT: the core object and the trigger
Method	Created by, when	Core object	What triggers a trade	How objective	Timeframes
TheStrat	Rob Smith. He dates the start to 2010 and taught it in public from the early 2010s.	Each bar: a 1, 2 or 3 against the previous bar. Timeframe continuity. Broadening formations.	Price trades through the trigger: the previous bar’s high or low, an exact price.	Each label is true or false. A bar took the previous high or low, or it did not.	Any. Count 4 or more at the same time, for example month, week, day and 60 minutes.
ICT	Michael J. Huddleston (The Inner Circle Trader). Popularized through the 2010s and early 2020s.	Zones and liquidity: order blocks, fair value gaps, buy-side and sell-side liquidity, market structure shifts.	Price comes back to an entry zone (an order block, a fair value gap or the 61.8–78.6% retracement), sometimes after a market structure shift.	Discretionary, per public guides. The trader decides which zone counts.	Several, plus set session windows (kill zones), such as the London and New York sessions.
SMC	The online trading community, from ICT’s teaching. The label is credited to the community.	Market structure (swing highs and lows), order blocks, fair value gaps, liquidity, premium and discount.	An entry zone at the origin of a move (an order block or a gap), sometimes after a sweep of a minor level.	Discretionary. Two traders can mark the same chart in different ways.	Bias on the daily or 4-hour chart, entries on the 15-minute to 1-minute chart.
CRT	The ICT and SMC community, in the 2020s.	The range of one candle: its high, its low and its 50% level.	The next candle trades beyond one side and closes back inside. Targets: the 50% level, then the other side.	Defined by highs, lows and a close. The details vary by teacher.	The range on a higher timeframe (monthly to 1-hour), the entry on a lower one (15-minute to 1-hour).

Sources for ICT, SMC and CRT: The Inner Circle Trader, FXOpen’s ICT concepts guide, TTrades on market structure shifts, and LuxAlgo’s pages on Smart Money Concepts and Candle Range Theory. Their teachers use different details. This table uses the common versions.

ICT and Smart Money Concepts

ICT is the teaching of Michael J. Huddleston, who teaches as The Inner Circle Trader. SMC grew out of his teaching in the online community, and in practice the two names overlap.

Both read where large orders rest or traded. An order block is the last opposing candle before a strong move. A fair value gap is the gap that a fast move leaves between candles. Liquidity is the stops and pending orders that rest above highs and below lows. ICT also uses kill zones: set session windows, such as the London and New York sessions.

TheStrat sees the same stops. Traders place stops against obvious pivots, so when price goes back through a range, it triggers those stops and the stops speed price up (see levels of reclaim). The difference is the object. Some ICT and SMC zones have exact definitions, such as a fair value gap, but the trader still decides which zone counts, and two traders can mark the same chart in different ways. A TheStrat label is a fact of the high and the low: what do we know to be true?

Candle Range Theory and the failed 2

CRT treats each candle as a range. In its common three-candle model, candle 1 sets the range. Candle 2 trades beyond one side of it and closes back inside. Candle 3 is expected to go to the other side, first to the 50% level of candle 1.

In TheStrat terms, candle 2 is a failed 2: it took one side of the previous bar and failed. A failed 2 is a potential 3. The failed breakout of a range increases the probability that price tests the other side, so the other side is the target. If the same bar takes the other side, the bar is a 3, a broadening formation: the figure above shows this on the week of April 21, 2025. If the next bar takes the failed 2’s other end, it is a 2-2 reversal. When it reaches the other side of the range, the two bars print a compound 3.

The idea and the final target are the same. The test is different. CRT’s test is the close: candle 2 must close back inside the range. TheStrat reads the failure while the bar trades: a 2d that trades green is a 2 going 3. In the 1-3, the setup in the figure above, the trigger is the reclaim of the broken side, and you do not wait for the bar to close.

The dates: Rob Smith published this on his YouTube channel on January 1, 2018. A bar that comes back into the previous range is a potential 3, and its target is the other side. He taught it again in recorded TheStrat coaching sessions in January and February 2018 (January 18, February 15; posted on YouTube in November 2020). Public sources place CRT in the ICT and SMC community in the 2020s.

Frequently asked

Is TheStrat the same as ICT or Smart Money Concepts?

No. ICT and SMC read zones that the trader marks, such as order blocks and fair value gaps. TheStrat reads each bar as a 1, 2 or 3 against the previous bar, across 4 or more timeframes, and acts when price trades through an exact price.

Is Candle Range Theory the same as TheStrat?

They share one idea and one final target. In CRT’s candle model and in TheStrat’s failed 2, price takes one side of the previous bar’s range, fails, and targets the other side. CRT waits for the candle to close back inside the range. TheStrat reads the failure while the bar trades, and the trade is on the moment price trades through an exact trigger. Rob Smith taught the failed 2 as a potential 3 in 2018, and CRT appeared in the ICT and SMC community in the 2020s. TheStrat also adds timeframe continuity on 4 or more timeframes, and it labels every bar.

Who created TheStrat, ICT and CRT?

Rob Smith created TheStrat. He dates its start to 2010 and taught it in public from the early 2010s. Michael J. Huddleston teaches ICT as The Inner Circle Trader. CRT came from the ICT and SMC community in the 2020s, and its details vary by teacher.

How objective is each method?

A TheStrat label is true or false: a bar took the previous bar’s high or low, or it did not. So two traders get the same label and the same trigger price. Public guides call ICT and SMC discretionary. The CRT test is defined by highs, lows and a close, and its details vary by teacher.

Does TheStrat backtest patterns?

No. TheStrat is the 3 universal laws that govern all price action. It does not backtest patterns. It gathers evidence of participation by price and time, and this picks up algorithmic trading in any asset class.

TheStrat was developed by Rob Smith. These docs are written by Alex Sopa (AlexsOptions) and quote his teaching. Work in progress: spotted an error? Tell Alex.

For AI agents: free TheStrat tools (MCP and REST) at thestrat.ai/agents.