What Is ICT PO3, and How Do Traders Use It?
The ICT Power of 3 (PO3) is a structured approach to price action analysis that aims to interpret institutional market behaviour. It divides market movement into three distinct phases: accumulation, manipulation, and distribution. Recognising these phases may help traders assess potential areas of interest and align their strategies with broader market dynamics.
This article outlines the core principles of the Power of 3 framework, providing a detailed examination of how it is applied in the context of institutional order flow and market structure.
The ICT Power of 3 (PO3), or the AMD setup, is a strategic trading framework developed by Michael J. Huddleston, better known as the Inner Circle Trader. This approach revolves around three critical phases: accumulation, manipulation, and distribution, which collectively may help traders understand and anticipate market movements.
Accumulation PhaseDuring this phase, smart money or institutional investors accumulate positions within a price range, often leading to a period of low volatility and sideways movement. This stage sets the groundwork for future price movements by creating a base of support or resistance.
Manipulation PhaseThe manipulation phase involves deliberate price moves by smart money to trigger stop losses and deceive retail traders. In a bullish scenario, prices may dip below the established range, while in a bearish market, prices might spike above the range. This phase is seen as being characterised by sharp, misleading price movements aimed at manipulating liquidity.
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