Welcome to this new educational thread about PO3!
This is all you need to know about the Power Of Three and how to trade it! ๐งต
This is all you need to know about the Power Of Three and how to trade it! ๐งต
PO3 (Power of Three) is also known as AMD, which means Accumulation, Manipulation, and Distribution. This "pattern" looks like this:
To clarify things, the blue rectangle is the accumulation zone, the red is the manipulation, and then the green is the distribution. As you can see, the price always expands in the contrary direction to the manipulation.
To be honest, we can find the PO3 literally everywhere, every candle is a PO3 itself:
You may be thinking "Cool, but how do I trade this thing?" Let's see how to do it!
1st: Look for an accumulation, in other words, a range:
2nd: You look for a POI (Point Of Interest) around the range, the price should go mitigate that POI and distribute in opposite direction. In this case, I've seen a 15 min FVG just above the range:
3st: Get ready, look for another POI on the other side, and establish that point as your TP. In my case, there are no FVG or OB, so I will target an old low. I'm expecting something like this:
We see that the price manipulates the range as we thought and hits the POI, now we enter the position:
In this case, I put the SL in the 50% of the POI, you can put it on the top of the previous candle or wherever you want. Depends on your trading style (risky/conservative)
And there we go, we booked 3,5R in this trade:
Hope you enjoyed and learned! Taking this into account can drastically change your perspective when trading!
Take care fam,
Fuster
Take care fam,
Fuster
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