Power of 3 (AMD)

What it is

Power of 3 describes a period (often a day) in three phases. Accumulation: price ranges quietly near the open. Manipulation: a quick move the wrong way that runs stops (often a sweep of the range). Distribution: the real move in the intended direction.

In a bullish day, the manipulation is a drop below the open, so the day's candle ends up with a low below its open and a close near the high.

How to spot it

• A tight range early in the session.
• A sharp false move out of it, then a reversal through the range.

How to use it

• Wait for the manipulation to happen, then trade the reversal back through the range towards the draw on liquidity.
• Stop beyond the manipulation's extreme.

Common mistakes

• Trading the manipulation move as if it were the real move.
• Forcing the pattern on a day that simply trends from the open.

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