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okay folks welcome back okay this
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teaching is going to be specifically
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dealing with accumulation manipulation
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and distribution
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okay the ICT concepts used in this
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module the ICT power of three importance
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of developing anticipatory price skills
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engineering liquidity in the market
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neutralizing liquidity in the market
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market making and pairing of orders what
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accumulation looks like in bull and bear
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conditions where does manipulation occur
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in bull and bear conditions what
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distribution looks like in bull and bear
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conditions all right so we're looking at
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a crude depiction of a open high low
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close bar and for the purposes of this
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teaching every individual bar or candle
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it's going to be referred to as a daily
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range or daily bar okay now everything
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I'm going to suggest to you here is
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applicable to every time measurement
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okay I know is every time interval if it
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can be charted this same phenomenon or
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concept can be applied to it so
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regardless of what time frame you can
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pull up and form it into a chart as long
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as you have a beginning time the highest
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value to the lowest value and an ending
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in terms of measuring time this concept
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is applicable okay
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but for the sake of our discussion here
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and for something you can practice and
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look for a few times a week
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the ICT power 3 is basically a concept
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of looking for accumulation waiting for
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manipulation and then looking for a
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period of distribution now I look at
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candlesticks because it helps to be able
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to see after many years of looking at
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price action it's very hard on your eyes
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as long as I've been doing it staring at
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spending lots of time in charts both on
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a screen and on paper I can see that my
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my eyesight has diminished over the
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years one of the benefits of knowing
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what you're looking for if spending far
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less time in the charts then most
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traders that like me and before me we
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spent a lot of time researching and
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looking at things so I gravitate towards
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candlesticks because it's easier on the
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eye not that there's any magic behind it
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but the same concept is seen here with a
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bullish open high low close bar to the
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left is comparable to what you would see
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any bullish close candlestick much much
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easier to see by staring at that versus
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that little tick to the left or the
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little tick to the right that
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distinguishes the open and close on
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individual candles or bar okay so back
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to our discussion using the open high
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low close bar it's gonna be a lot easier
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for me to describe the phenomenon that
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makes up my ICT power 3 and the
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origination behind this idea was
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inspired by my mentor Larry Williams he
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made a point in one of his lectures they
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ended up repeating several times for a
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number of years but he made a point of
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making a remark about he wished he knew
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how the traders or who the traders were
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that could be buying below the open or
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selling above the clothes on bullish or
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up close days and I took that as a
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personal challenge and I spent of the
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first quarter of my 25 years mastering
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just that concept because I felt that
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it was enough for me to work towards
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cracking that code if you will and I
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think I've done it I've thought of other
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people so I know that it's something
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that is real it's tangible it can be
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repeated not only in my own results but
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other people that have learned from me
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but it all hinges on the reference point
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that starts our time integral and again
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we're referring to every bar or open
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high low close bar depiction in my
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diagrams as a representation of one
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daily bar okay so a full 24-hour period
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it does not matter that if it's Forex or
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commodities or bonds or whatever it is
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if it's a market and it can be measured
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in time intervals the highest value the
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lowest value a time at which it starts
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trading in it time and ends trading you
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only need is for reference points so the
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open high low and close is all we're
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concerning yourself with here now the
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first of the four is the opening price
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now for definition terms this is the
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initial value price prior to any
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imbalance and I'll talk more about that
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as we go the closing price is the ending
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value price post price imbalance okay
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the portion it makes up the range
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between the open and closed is referred
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to as range expansion and this is a
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dynamic price imbalance now this can be
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a bullish or bearish imbalance relative
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to the open but for example sake our
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first one is going to be referring to a
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bullish up close so this would be a
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bullish range expansion or a dynamic
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price imbalance of a lot more movement
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to the upside seeking a higher price
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above the initial value price of the
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opening price in layman's terms we're
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looking for a bullish close okay
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as far as it goes in terms of
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accumulation manipulation and
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distribution or power three the first
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thing we have to determine is what is
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accumulating now if we're bullish on the
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marketplace we would be looking for
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accumulation in the form of long
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positions building up it's gonna be
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around that opening price and I'll talk
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more about the opening pricing in future
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tutorials but the opening price just
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above it or below it no more bullish
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that's where Long's are accumulated now
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who's accumulating there's long
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positions smart money when we're bullish
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and we're anticipating a bullish range
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expansion to the upside okay or higher
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close we would be hunting a manipulation
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cycle immediately after the opening
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price so on a daily range that opening
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price if we're bullish we want to be
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buying at that opening price or below it
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ideally why would we want to be buying
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below the opening price we're more
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bullish because the market makers are
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going to be looking to engineer short
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liquidity what does that mean if a
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market breaks quickly below an old low
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there are traders that look to be a
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breakout entry so they'll look to sell
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short on a stop this engineering forces
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liquidity in the market place to sell at
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a very very low price that run below an
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old low or a quick sudden movement will
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entice triggers that are on the
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sidelines just watching price and you
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know what that feels like if you watch
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the lower timeframe charts any sudden
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moves our your heart starts to have
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palpitations you get excited you think
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it's gonna keep going lower what happens
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you take debate you go in there and you
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sell short in the market stops on a dime
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reverses and goes north immediately
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below the opening price on a daily range
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when it's bullish this initial drop down
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is very significant because it's going
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to engineer willing parties to sell
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short
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that selling short will flood the market
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with the counterparties to smart money
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wanting to buy it at a deep deep
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discount the other form of manipulation
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that takes place when it's bullish is
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neutralizing long liquidity that means
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there's individuals it's probably
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already long or just recently bought
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near the opening price in the drop down
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below the opening price will upset their
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long position in other words it'll just
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run their stop not to engineer them into
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a new lower entry but to knock them out
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of an initially well-placed position so
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we're seeing two conditions they're
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happening at the same time the opening
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price and below it when more bullish is
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knocking individuals out that's right
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that would otherwise be profitable the
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market rallies and it's also inducing or
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engineering of short-term sentiment
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shift to bearishness by running
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short-term lows not only would we take
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out long holders with their sell stocks
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but traders that want to sell short on a
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stop they would be in they would be
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placed in on the market on the wrong
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side and while we're selling short in
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otherwise bullish market so finally as
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we interpret this the manipulation is
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we're looking how the market makers pair
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orders by pairing these sell stops with
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smart money buying interest we can see
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the manipulation cycle as it really is a
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run below the opening to accumulate long
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positions before the big up move and
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finally the distribution cycle where
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smart money pairs its long exits selling
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out of their lungs with pending buy
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interest now that pending buy interest
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is going to be in the form of buying
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above an old high that would be a
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breakout artists idea they're gonna want
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to break out above a previous high and
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they would view that as strength buying
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string
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while smart money will look to sell
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their long position to those breakout
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artists that want to buy above an old
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high or those individuals that would
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probably try to sell short intraday
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maybe have a buy stop above intraday
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high smart money would look to run
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through that intraday high and sell it
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to those by stops so their long and
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exits would be paired with a short term
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intraday swing high if we seen a nice
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little retracement lower intraday before
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the close that's where an area of
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distribution would come in so we're
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looking at a reverse idea here the open
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high low close with a down close and
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again this representation is a crude
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depiction of a daily open high low close
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bar and we could see that same thing in
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the form of a bearish closed candle much
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easier on the eye but we're gonna take
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our focus back to the open high low
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close bar and again the opening price
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much like we just said but just for
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completeness sake it is the initial
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value price prior to any imbalance the
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closing price is the ending value price
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of that time interval that you're
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measuring in other words what time frame
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you're looking at if it's daily it's the
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ending value for the daily range post or
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after the price imbalance in Lourdes the
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movement it took place between the open
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and where it's now closing and we have
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the range expansion cycle that is
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basically dynamic price and balance so
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between the opening price and the
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closing price when we're bearish this is
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what we would be expecting or
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anticipating in price became a lower
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close now in the form of power three
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what is accumulating well from the
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opening when we're bearish short
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positions are building up and who's
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building up short positions smart money
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at the open
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price or just above the opening price
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when we're bearish we would be
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anticipating manipulation and what form
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of manipulation will we expect to see
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engineering long liquidity no words
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we're looking for a quick sudden
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movement higher to entice breakout
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artists that want to buy want to break
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out and they would be placed in on the
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wrong side of the marketplace another
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form of men
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population this would be neutralizing
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short liquidity in other words those
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individuals that would already be short
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in the marketplace that would otherwise
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profit from the future coming decline
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they are knocked out by having thereby
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stops tripped so they're neutralized in
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their short position and their short
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position being neutralized is a buy stop
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so that buys thought that hits the
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market as a market order smart money
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will sell to their willing buy stop
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somewhere so if the market trades up to
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your buy stop that buy stop becomes a
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market order to buy at the market smart
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money will be counterparty to that they
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will sell to those buy stops but their
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sell position is to ride it lower and
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make money manipulation and it's true a
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sense is in this form when we're bearish
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at the opening price or above it by
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stops are being paired with short
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interest on the form of smart money and
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finally at the end of the day the
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distribution cycle is seen where smart
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money pairs it's short exits or covering
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with pending sell interest in other
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words smart money's going to be short in
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together of short positions they have to
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buy it back and they will be targeting
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some old low what would be resting below
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an old low sell stops those sell stops
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once they're triggered they become
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market orders to sell to market place
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which floods the market with sellers and
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the best time to cover a short is when
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there's a flood of sellers in the
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marketplace willing to sell at a low
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price and this would be the distribution
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cycle of the daily range okay so what
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does accumulation look like in a full
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condition or when it's bullish it's not
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important we zoom in here and see any of
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the details I just wanted you to see the
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overall characteristics and the green
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shaded area you can see that there's a
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consolidation around the opening price
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and that consolidation leads way to a
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decline which gives us the framework for
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what does this manipulation look like in
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a bull condition well this is what
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manipulation looks like right before the
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March starts to trade higher
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after a consolidation when the
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accumulation of lungs are being made the
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problem is you see that decline below
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that green shaded area as weakness and
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who would be wanting to buy ahead of
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that Smart Money traders okay
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they have very deep pockets and the
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market has a tendency of creating this
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fake move okay we're in choices or
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induces the opposite mindset or
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sentiment this drop down out of that
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consolidation when we're overall bullish
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is manipulation it's knocking out
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short-term lows so anyone that's longer
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knocked out we can't for the profit from
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the up move and it's also putting
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traders in on a breakout short and
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they're gonna be on the wrong side of
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the marketplace and if finally at the
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highs it a day we have our distribution
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where the smart money exits their long
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positions by selling above an old high
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whereby stocks would be resting so
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there's buy stocks would be hit floods
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the market with buy stops buyers at a
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higher price smart money's going to sell
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their long positions to higher buying
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interest traders in the form of their
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buy stocks being tagged okay in what
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does accumulation look like in a bare
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condition we have a consolidation and
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price moves higher which would be the
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manipulation now if you look at the left
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side of the chart you see a double top
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that's exactly where what buy stocks
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would resign okay lesser informed
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traders would have their buy stocks
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resting above that it would view that as
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a stiff resistance price point and those
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levels are too clean
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the market will in fact want to go
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through their probe it for buy stops
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those buy stocks are gonna trigger
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anyone that's short is now allowed to be
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profitable and the move going lower so
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they're neutralizing their shorts by
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hitting their box tops also breakout
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artists let's see that equal high to the
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left of the chart and the consolidation
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that move out of that they would be
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buying that on a break
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or trying to buy strength in their eyes
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both are incorrect and what we're
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actually seeing is a market driving
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higher to pair traders to buy higher or
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at a high price and short sellers on the
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smart money camp they're going to be
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selling short to those individuals that
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want to buy a high price to make a
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profit as the market moves eventually
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lower towards the end of the day we see
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the distribution cycle come in we're
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short holders in the smart money camp
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we're going to be looking to collapse
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their short positions to get have a
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short position you have to buy it back
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you have to look for an area to run
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below old lows you look at the original
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consolidation 20 pips below that that's
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what we see the load a form it's exactly
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where smart money would be collapsing
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their short positions for a day trade
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and we see the ending cycle their
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distribution smart money collapsing
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their short and a form of buying it back
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at an area where sellers below the
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market would be interested in selling
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overall if you understand this concept
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and there's lots more of information
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that's coming weigh in by way of my
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tutorials you can look at the market
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place like this and see the original
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consolidation here in the green market
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reaches down below the consolidation
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into an area of liquidity which is 10
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pips below equal lows there sell stocks
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are triggered where smart money would be
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buying once those sell stops are tripped
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they're buying below the day the market
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rallies up we have an expansion move or
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reins expansion up into a move of
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running 20 pips above the old high and
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your distribution cycle goes into the
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marketplace and there's a complete daily
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range using the power 3 concept that
00:19:34
I've outlined here so hopefully you
00:19:35
found this teaching insightful there'll
00:19:37
be more built on this with the future
00:19:39
tutorials and until next time I wish you
00:19:42
good luck and good trading
