ICT's Power of 3 says every candle, whether daily, weekly or 4-hour, is built in three stages. He also calls it AMD: accumulation, manipulation, distribution. It is Wyckoff's cycle (Module 4) compressed into a single candle.
The three stages of a bullish day
- Accumulation: around the open, price ranges quietly. Large traders build positions.
- Manipulation: price drops below the open, often sweeping a nearby low (the Asian low, the previous day's low). This forms the low of the day and traps sellers. It is the Judas swing of chapter 8.
- Distribution: price expands upward away from the open, toward the day's draw on liquidity, and closes near the high.
A bearish day is the mirror: a rise above the open that makes the high of the day, then a fall to close near the low.
The practical rule
| Daily bias | Look to enter | Expect the extreme of the day | Target |
|---|---|---|---|
| Bullish | Below the open, during manipulation | Low forms early, often in London | The draw on liquidity above |
| Bearish | Above the open, during manipulation | High forms early, often in London | The draw on liquidity below |
If you believe the day is bullish, the best prices are below the open. Buying above the open means buying after the manipulation is over, with a wider stop and less room to the target.
Which open?
ICT uses the midnight New York open as the reference for the day. Others use the 18:00 New York futures open, or the 8:30 or 9:30 open for the New York session. Pick one and use it consistently.
Key takeaways
- Power of 3 (AMD) splits a candle into accumulation, manipulation and distribution.
- On a bullish day, manipulation drops below the open to form the low; distribution rallies to close near the high.
- With a bullish bias, look for entries below the open; with a bearish bias, above it.
- Choose one reference open, such as midnight New York, and use it consistently.