What it means
Power of three describes a candle or session in three phases: accumulation (a quiet range near the open), manipulation (a false move against the direction) and distribution (the main move). AMD is the same idea.
On a daily candle, a bullish PO3 looks like an open, a low wick below it, then a close near the high.
Why traders use it
The model connects session ranges, Judas swings and the day's range into one story. It helps decide which side of the range to watch for the manipulation leg.
Chart examples
Accumulation, manipulation, distribution
How to identify it objectively
- 1Mark the open (midnight or session open).
- 2Accumulation: a tight range around the open.
- 3Manipulation: a break of that range against the bias, followed by a reclaim.
- 4Distribution: the expansion in the bias direction.
Bullish use
- 1Range near the open.
- 2Drop below the range (manipulation).
- 3Expansion up through the open (distribution).
Bearish use
- 1Range near the open.
- 2Rally above the range.
- 3Expansion down through the open.
What confirms it
- Manipulation reclaimed quickly.
- Expansion with displacement.
What invalidates it
- The "manipulation" leg keeps going: it was distribution.
How a hypothetical setup is built
Entry
After the manipulation leg is reclaimed, on a confirmation close.
Stop
Beyond the manipulation extreme.
Target
Expansion toward the day's draw on liquidity.
A hypothetical illustration of how the concept is turned into a plan, not a recommendation. Practise it on a paper account first.
Related concepts
- ICT Sessions & ModelsJudas Swing
- ICT Sessions & ModelsMidnight Open and True Day Open
- LiquidityDraw on Liquidity (DOL)
Historical testing
Not tested on The Tradeskill. Phase boundaries need exact rules before testing.
Limitations: when it fails
- Easy to label after the fact, hard in real time.
- Many days do not follow three clean phases.
- Requires a reliable bias.
Knowledge check
Pick an answer to see the explanation. Nothing is saved.