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Understanding Smart Money Trading Concepts

Feb 5, 2025

Lecture Notes: Smart Money Trading and the Power of Three

Key Concepts

  • Smart Money Trading

    • Opportunity to trade against retail traders.
    • Midnight Opening Price (MOP)
      • Important reference point for daily trading.
      • Denoted as MOP, it marks the candle open at 12 a.m. Eastern.

  • Power of Three

    • Traditional teaching: Accumulation, Manipulation, Distribution.
    • Proposed method: Manipulation, Accumulation, Distribution.

Phases of Power of Three

1. Manipulation Phase

  • Time Frame: 8:30 to 9:45 a.m. Eastern.
  • Objective: Push price towards or below the MOP.
  • Bullish Day: Price begins above MOP and is pushed towards it.

2. Accumulation Phase

  • Price is near or below MOP.
  • Indicators of Accumulation:
    • Three drives pattern, consolidation.
    • Position building by smart money.

3. Distribution Phase

  • Smart money exits positions by the end of the day.
  • Price is pushed to highs and is distributed.

Practical Application

  • Chart Analysis

    • Use of MOP as key support/resistance.
    • Observational insights on price behaviors before and after MOP.
    • Patterns: Three drives, slip and rip setup.

  • Trading Insights

    • Importance of midnight opening in predicting daily trend.
    • Trading strategies based on the Power of Three phases.
    • Recognition of manipulation for informed trading decisions.

Strategic Considerations

  • Bias and Price Action

    • Understanding market bias without dependency.
    • Identification of bearish/bullish days using MOP.

  • Execution Notes

    • Monitoring price actions around MOP for trade entry.
    • Awareness of liquidity pools and stop-loss triggers.

Additional Resources

  • Funding Opportunities

    • Overview of verified funding companies.
    • Discounts and promotions for trading accounts.

  • Personal Mentoring

    • Mentoring sessions for traders familiar with ICT concepts.
    • Focused on transferring knowledge efficiently and effectively.

Closing Thoughts

  • Aim to simplify complex ICT trading concepts for practical use.
  • Importance of feedback and continuous learning through examples and chart analysis.

These notes cover the essential lessons from the lecture on smart money trading and the Power of Three, providing a framework for understanding manipulation, accumulation, and distribution phases in daily trading activities.

Full transcript