Overview
This lecture introduces the AMD (Accumulation, Manipulation, Distribution) or Power of 3 trading model, explaining its phases and how to identify and trade them across different time frames.
AMD Model Overview
- The AMD model divides price movement into three phases: Accumulation, Manipulation, and Distribution.
- Accumulation is a phase where the price consolidates within a range before a significant move.
- Manipulation refers to false breakouts or rapid moves to trigger stop losses and capture liquidity.
- Distribution is when the price moves strongly in one direction, often following manipulation.
Application Across Time Frames
- AMD phases can be observed on any time frame, including daily, 4-hour, and 1-minute charts.
- The pattern repeats: accumulation, manipulation, then distribution on each time frame.
- The end of manipulation is significant for identifying trade entries and exits.
Trading Strategy Using AMD
- During accumulation, traders watch for price consolidation and equal highs/lows signaling potential liquidity pools.
- Manipulation often involves moves below/above these liquidity levels, offering trade opportunities.
- After manipulation, traders can enter in the direction of the distribution phase.
- Time frames affect trade duration; short time frames (1-15 min) suit scalping, longer ones (1 hr, 4 hr, daily) suit swing trading.
- Identifying the end of manipulation helps clarify when to close shorts and open buy positions.
Practical Examples & Timing
- Example setups involve trading around liquidity runs and manipulation phases, especially during market open times (e.g., London or New York sessions).
- Significant manipulation often occurs between 3 am and 4 am New York time ("Silver Bullet" window).
- Tools like TradingView can be set to New York time zone to track optimal windows for manipulation and distribution.
Key Terms & Definitions
- Accumulation — Phase where price trades in a range, building positions before a major move.
- Manipulation — Rapid, deceptive moves that trigger liquidity and stop losses, setting up the next trend.
- Distribution — Sustained move in one direction, capitalizing on earlier accumulation and manipulation.
- Liquidity Run — Price movement that targets and takes out clustered stop orders above/below key levels.
- Silver Bullet — Critical time window (3–4 am NY time) for significant market moves.
Action Items / Next Steps
- Review examples of AMD on different time frames.
- Set charting software (e.g., TradingView) to New York time zone.
- Prepare to focus on manipulation and distribution timing in the next lecture.