Transcript for:
Understanding Power of Three in Trading

so power of 3 AKA AMD Cycles AKA o h l c and o l h c so what do all these things mean first off power of three what is the power what is the three power of three refers to accumulation manipulation distribution AMD cycle is also accumulation manipulation distribution ohlc is open high low close it refers to a candle on how it opens makes the high makes the low and then closes same for o l h c open low high close that would of course be a bullish candle and open high low close would be a bearish candle so that is what it stands for now how can we use power of three and what do these things actually mean so just to give you some context right here this is both or Forex both for indices this is also for Commodities this is for everything in the market every single Market you can name that is what it works on every single one first I will go into the sessions how we can use them on sessions and slowly and gradually I will zoom out and at the end it will make the most sense so if you follow along with the progress then it will make a lot of sense at first it might be a little bit confusing but that's why I'm here to warn you because allow that confusion to be there and then at the end it will all of a sudden make a lot more sense alright if we dive into the five minutes and we look at a London open so at the London kill zone right here at what time does London Kill Zone start at 2 am right that's what we touched on then we have that candle or London open if we zoom in a little bit more on that candle right there that is the open of the candle right and when we refer to open low high close open right there the low of the candle a high close and if you look at the top left right there you'll see the exact numbers that we're using right there that is the Open high low close and if we have a bearish candle on this candle for example it would be open high low close for this candle we now use the open of that candle because that is the open of our London Kill Zone if we now zoom out again what is actually happening here where is the end of London Killzone this candle this 455 is actually the end because on this candle we already start at 5 am so the open of this candle is your end and the close of that candle is also your end so just for Simplicity sake I will Mark the open of that candle because that is your ending right there of the London Kill Zone so if we look at what happens right here what do we see open hi low close that is the exact same thing that we are seeing on every candle so if we now zoom in and I'm going to zoom in on a specific candle for example this candle right here open hi low close this candle could have very well been this London Kill Zone that is the exact same fractal candle so if I now use the FX Market sessions indicator again and inside the settings I turned on the candle display what can we see we can see an exact candle right here this is what it would look like on a three hour candle because the London Killzone is three hours so in those three hours what happens on the lower time frame is we open we have a high created right there we have the low created and then we close that is the basics of it now of course we also want to go over power of 3 and AMD Cycles accumulation manipulation distribution what is accumulation what is manipulation what is distribution accumulation happens at the opening range let's first go over manipulation manipulation is the top right here if we are expecting a bearish candle for example like this then the top this Wick is the manipulation so everything above the open right there is the manipulation of course if we were expecting bullish prices then the bottom Wick would have been manipulation because that is where price is manipulating it is manipulating who it is manipulating retail traders to go long right here and then it's doing the exact opposite right there then what is our accumulation phase our accumulation if we now drag our Fibonacci from this high from the top of the manipulation so the top of that Wick back to the open and we have a symmetrical swing so you have one zero minus 1. so these are the Fibonacci settings right here very simple and you have a symmetrical swing of that manipulation this is your accumulation phase what does that mean when you want to get involved in the market ideally you want to get involved in the manipulation phase if you can't get involved in a manipulation phase or you want to wait a little bit longer than this accumulation phase this is where you want to get involved so after we come below that accumulation phase that is not where you want to get involved anymore at least not looking for shorts then what is our distribution phase our distribution phase is what we just saw on manipulation the top of the wick to the open but now it's the opposite it is that bottom of the wick to the clothes that Wick right there that is your distribution what is it Distributing it is Distributing profit that it made from this manipulation right there and this accumulation and right there it is taking profit who is taking profit well you can argue an algorithm central banks Etc institutions are taking profit right there and who are they profiting off of opposing liquidity again retail liquidity with retail liquidity I'm of course referring to retail Concepts bigger hedge funds Etc that are trading retail Concepts that are getting trapped right there so right here liquidity got trapped into the market us or not really us but the central banks Etc institutions they are in the market right there so they for example are in the market right there where do they want to Target they want to Target at opposing liquidity what is opposing liquidity well we trapped in Long Traders right there now we want to trap in short Traders so we can take Longs we can do the exact opposite and we can take profit which is aiming for those lows right there and eventually we slowly start to take profit right here and that is why you are seeing these moves up right there and that is exactly the reason why we move higher even from here so accumulation manipulation distribution but we don't just apply the power 3 and we don't just look at accumulation manipulation distribution everywhere there needs to be context behind it in this sense and the reason why I started on the sessions and applying the power 3 there is because right here it will maybe be a bit confusing but once we slowly zoom out now it will make a lot more sense so right here if I remove this Fibonacci this again is our London session now what is our London session come into it comes into liquidity what kind of liquidity if we zoom out on the one hour right here it is taking liquidity above a one hour high right there going back to fill in this fair value Gap completely with that order block right there and what does it do right now on the five minute we can see we are trapping long Traders and then we are dropping off and then where are we heading if we now zoom out on the daily what can we see we are reaching for that previous day low into a daily fair value gap which is a very clean Target to aim for if you now drop back down into the five minute long Traders threat we are in a short position aiming for again liquidity right there and we have a daily provide Gap right there and we have the previous day low right there that is our distribution and can you see here the importance of those skill zones the importance of time right there because right there at the end of London we create the low of the day now if we now go into the next session for example we go into New York right there that is New York and and the open of New York is right there what can you notice I noticed the exact same thing we take some liquidity there we first have to move down the manipulation phase accumulation right there and then afterwards we have distribution right there distribution at what at a fair value Gap right there you need to remember what we talked about where value gaps or the blocks are also liquidity and we have the exact same cycle we have the manipulation the accumulation and the distribution so if I pull up the FX Market sessions again we now see the exact same thing with that candle the manipulation accumulation their distribution at what level at an opposing premium array discount array to a premium array that is our distribution right there our power of three but what if we now zoom out a little bit more here we are on the daily time frame we just mentioned this daily fair value Gap with that previous day low right there what do we see on the daily candles open low high close we see the exact same thing what does it reach into a discount array what is it aiming for on this Thursday we have an open low a high close what is happening there and why is Friday dropping off AKA our thank God it's Friday right there an opposing premium array again on these individual days you have accumulation you have manipulation and you have Distribution on each individual candle so if we dive into these individual candles again the time you would use can be just that candles open off of the daily time frame what I mostly do and what most people do is you will use the midnight open of New York right there at that open Dead little up candle right there that is zero zero zero zero that is New York midnight open that is what institutions refer to because they want to be buying below the midnight open on bullish days the same exact thing we just saw on the London session same exact thing as we saw in New York session so right here when it comes below that right here this is where we want to get involved and then right here what do we see again if we now draw a Fibonacci again from this low to that open this is your accumulation phase this is where you want to get involved to Target those potential highs to Target these highs and to Target even the whole weekly range manipulation accumulation and then at the end of the week what do we see distribution right there this is the top of the week because this is applying it to every single day but if we now zoom out and go to every week what do we see manipulation with the accumulation so accumulation manipulation distribution we see the exact same Canon if we Mark that open again and then go into the daily time frame again we want to be buying below that open if we are expecting a bullish week can you now see how it is starting to make sense and how it is fractal we went from sessions to days to now weeks all the same stuff and to now even months here we are on the monthly time frame if I now go on to the monthly time frame and I use this volume imbalance or even this fair value Gap right there what do we see we see the exact same thing open low high close open a high low close if we now go back into the daily time frame and where does the month start right here and where did this month start right there on that day can you see how in both months this month and this month we are first having that manipulation then we have the meat in the middle aka the trending days if we refer this back to a weekly profile that we just saw on this weekly right there what does this create it's just your weekly profile within it but a weekly profile you would more Define it you would more zoom in so if we refer back to this monthly candle this is the exact same as a as a weekly profile just you can say a monthly profile you would have Monday consolidation your Tuesday high of the month right there then we have Wednesday trending Thursday training and then eventually right here when the month ends we have your thank God it's Friday setup and we have the close of the month right there that is the exact same thing and the exact same thing happens here we have Monday or Tuesday trending trending Thursday Friday right here caps the month so at the beginning and the end of the month you want to be careful with getting involved and then in a new month you want to be careful trying to long this because this could very well be your manipulation phase and then the meet in the middle where the trend is the same for the week I always say if you want to get involved in a trend mainly focus on Tuesday and Wednesday and maybe Thursday but again remember the weekly profiles Thursday is TR and the trend could very well end the same or the month the same for the day same for the sessions all the exact same so right here if we now apply the weekly profiles we can see the exact same right if we go back to the weekly we have that manipulation the accumulation Distribution on each and every candle so if we Mark the opens that is exactly where we would want to get involved above the open of that candle if we then go into the daily we can see again when we are coming into that premium array we want to Mark those opens and we want to get involved above those opens and if we dive into then sessions we want to use the exact same thing and that is a very good guideline using these opens on how we can get involved at the best prices now you can see that I am not just taking any candle open and any candle close Etc there needs to be context behind it and that is why I didn't I didn't start off the A to Z guide with power three here you go just use this no I started off the A to Z guide with PD arrays higher time frame because understanding this monthly context understanding the weekly context right here that we are coming into this fair value Gap that is exactly what we need to understand first because then when we have that open and we sting into a premium array because we know we saw that premium rate coming and then we have our accumulation our expansion and then with an opposing discount array we can now have the distribution that is very important you're not just taking power of three because there's a power three no you need to combine it with PD arrays and that's exactly what we went over so every single power three I mentioned here it was combined with a premium or a discount array it wasn't just any power 3 it was in combination in context these Concepts need to be working in harmony they are all working in Harmony and that's exactly what makes so beautiful so right here we went from the sessions to the days which forms what the daily profiles we went over we weren't from the days to the weeks which forms what the weekly profiles we went over and then we went from the weeks to the months and you could even create your own monthly profile study this if you want send me markups directly to me on Twitter not through DM because my DMs are a bit full if you just sent me the Tweet itself or an Instagram story itself I'll see it and I'll be able to take a look at it alright perfect thank you thank you [Music]