ICT Power of 3 (PO3): What It Is and How to Trade AMD

What Is ICT PO3?

The ICT PO3 (Power of 3) is a trading framework created by Michael J. Huddleston, also known as the Inner Circle Trader. The model links daily price movement to institutional order flow and revolves around three core stages that you’ll see detailed in the next section.

In the first phase, smart money builds positions quietly while price consolidates. Then comes manipulation, where price moves sharply to trigger stop-losses and attract breakout traders. Finally, the real move happens: institutions unload or add to their positions and drive price with momentum.

This pattern appears across markets and repeats consistently on intraday timeframes. PO3 helps traders avoid chasing noise and instead focus on where liquidity pools form, where traps are set, and where the real opportunity begins.

ICT PO3 Structure and Phases

Price tends to follow a recurring sequence shaped by how institutions position themselves throughout the day. The PO3 framework breaks this into three phases: accumulation, manipulation, and distribution.

Each phase reflects a shift in purpose. Institutions create conditions, trigger reactions, and then move the market once the groundwork is in place. Recognizing that sequence gives structure to what might otherwise look like random movement.

Accumulation Phase

This phase usually takes place during quiet hours, often in the Asian session. Price moves within a narrow range while institutions begin building positions without attracting attention.

Key characteristics:

• Sideways price movement within a tight range

• Low volatility, limited momentum

• Forms near the daily open or significant support/resistance

• Stop-losses accumulate above and below the range

Manipulation Phase

Once liquidity is in place, price breaks out of the range, sharply and deceptively. These moves are designed to trigger stops, lure breakout traders, and provide smart money with better entries.

How manipulation appears:

• Sudden break above or below the accumulation range

• Stop hunts that trigger orders from both sides

• Quick reversals after a breakout traps traders

• Price often returns to or through the range midpoint
   

Distribution Phase

With liquidity captured and positions secured, institutions drive price in the intended direction. This is the real move of the day and the phase traders aim to participate in.

Typical distribution signals:

• Clean break of structure with strong follow-through

• Momentum candles pushing toward external liquidity

• Volume increase and reduced retracements

• Clear directional bias aligned with earlier setup

Trading the ICT PO3 Strategy

The ICT PO3 strategy depends on context. It’s not enough to recognize the pattern, you need to know where price stands in relation to key levels and what the higher timeframe is suggesting. That’s how institutional order flow unfolds, and that’s where the real edge lies.

This section walks through how to define your daily bias, mark the levels that matter, and time entries once price moves in line with the expected phase. In forex markets, where liquidity sweeps and false breakout patterns are common, PO3 gives you a clear framework to navigate them.

Set Daily Bias from Higher Timeframes

Before applying the ICT PO3 strategy to intraday setups, traders need a clear daily bias. This isn’t about long-term predictions, it’s about anticipating the likely direction of the next daily candle.

Higher timeframe charts, especially the daily and 4H, help reveal where price is most likely to draw liquidity next. This forms the foundation for understanding intraday PO3 phases.

Key elements traders rely on:

• Market Structure Shift: A broken swing high or low often signals directional intent.

• Fair Value Gaps (FVGs): Recent Fair Value Gaps can act as reaction zones, especially when tapped during the previous session.

• Institutional Order Flow: Order blocks, mitigation blocks, and displacement levels hint at where price wants to go.

A single daily candle can contain the full PO3 sequence, price builds in accumulation, sweeps stops in manipulation, then drives in distribution toward the close.

Marking Key Levels: Daily Open, Support, and Resistance

Once the daily bias is clear, the next step is to define the structure the market might use to unfold the PO3 sequence. Certain price levels act as magnets or barriers during each phase, helping traders anticipate manipulation and confirm distribution.

Key levels to mark include:

• Daily Open: Often acts as the midpoint around which accumulation and manipulation develop.

• Previous Session Highs and Lows: These areas are rich in liquidity and are frequent manipulation targets.

• Asian Session Range: This defines the likely accumulation zone, especially in forex pairs like EUR/USD or GBP/USD.

Entry and Exit Points in Bullish and Bearish Setups

Once bias and key levels are established, execution depends on recognizing how price behaves during each PO3 phase. Entries are not based on prediction; they come after structure aligns with the expected sequence, often signalled by an inside bar pattern.

In bullish conditions (daily bias up), look for:

• Accumulation below the daily open, often during the Asian range.

• Manipulation phase sweeping below session lows or previous day’s low to trigger liquidity.

• Entry after a market structure shift, ideally confirmed by a breaker block, FVGs, or mitigation zone.

• Target: Previous highs, session liquidity, or a logical POI above.

In bearish conditions (daily bias down), expect:

• Accumulation above the daily open to attract sellers.

• Manipulation pushing above previous highs to trigger stops and induce longs.

• Entry after bearish shift in structure, confirmed by price rejecting a premium zone.

• Target: Prior lows or clean liquidity resting below.
   

Precision in entry comes from confluence: price action, key levels, and institutional patterns must align. Avoid rushing into trades during manipulation as distribution is the real move.

Managing Risk in ICT PO3 Trading

Risk management plays a central role in making the ICT PO3 strategy viable over time. Each phase in the model gives clues not only for entries, but also for defining where trades become invalid and when it's time to secure profits.

What sets PO3 apart is how well it integrates structure and timing. But even a clean setup can fail if risk is poorly managed. Knowing where to place stops, how much to risk per trade, and when to let price run or cut the position is what turns consistency into long-term edge.

Risk-Reward Ratio in PO3 Trades

The ICT PO3 strategy is built on anticipating precision entries at the point of displacement. That typically allows for tighter stop-losses relative to the size of the expected move. Many traders look for 2:1 or 3:1 setups, but the key is not the number, it’s the consistency with which you can replicate that setup.

When risk-to-reward becomes skewed due to late entries or unclear structure, the edge of PO3 fades quickly. The model requires discipline, not just accuracy.

Common Mistakes in ICT PO3 Trading

One of the most frequent errors is misreading the accumulation range as distribution, leading to premature entries. Another is chasing price after manipulation without confirmation of shift in market structure.

Traders often skip the higher-timeframe context or ignore the daily open bias entirely, which makes it easy to misalign entries with institutional order flow.

Finally, overleveraging on setups that seem clean but lack a clear PO3 structure tends to amplify losses. The method rewards precision and patience, not aggression.

Practical Examples of ICT PO3 in Action

Applying the ICT PO3 model in real trading starts with being able to recognize the sequence as it unfolds. While every market session is different, the structure repeats often enough, especially in major forex pairs like EUR/USD or GBP/USD, for traders to plan around it with confidence.

Let’s look at two clear scenarios based on the daily bias: one bullish, one bearish. These examples reflect how institutional order flow typically builds through accumulation, triggers manipulation, and then commits to distribution.

Bullish ICT PO3 Example – EUR/USD

• Accumulation: Price forms a tight range during the Asian session, just below the daily open. Volatility remains low, and previous session lows remain untouched.

• Manipulation: As the European session opens, price sweeps below the Asian range, triggering sell-side liquidity. The move is sharp but lacks follow-through.

• Distribution: Price breaks structure to the upside, reclaiming the daily open and forming a higher low. Entry comes on the return to a fair value gap or mitigation zone, with targets set at previous highs or external liquidity above.
   

This setup reflects a clean alignment between time-based behavior and structural confirmation. It rewards patience and confluence, not early entry.

Bearish PO3 Example – GBP/USD

• Accumulation: Price consolidates above the daily open during the low-volume hours. Previous session highs create visible liquidity.

• Manipulation: In the early European hours, price spikes above the range, taking out buy stops and inviting breakout traders.

• Distribution: A shift in structure forms as price drops back below the daily open. A bearish displacement confirms the move, with entries triggered on a retracement to the manipulation zone. Target: the Asian session low or a clean sweep below it.
   

These setups are most effective when the daily bias is already pointing in the direction of the final leg. Without that context, the same structure can mislead.

Tools and Resources

Successfully applying the ICT PO3 strategy goes beyond recognizing the three phases. Traders who execute this model consistently rely on the right platforms, visual tools, and communities to refine their setups and stay aligned with smart money trading principles.

Platforms for Smart Money and PO3 Trading

To trade the Power of 3 strategy effectively, traders need access to precise charting and session-based tools, especially when working with intraday setups like the 15-minute or 5-minute timeframes.

• TradingView stands out for PO3 setups in forex. It allows traders to mark key levels such as the daily open, previous session highs/lows, and the Asian session range, critical components for identifying accumulation manipulation distribution patterns.

• MetaTrader 4/5 (MT4/MT5) are also widely used, particularly when combined with custom indicators that highlight institutional order flow or daily open bias.

Indicators for the Accumulation Manipulation Distribution Pattern

One of the most referenced tools is the ICT Power of 3 indicator featured on TradingFinder. It visually segments the trading day:

• Accumulation: 19:00–01:00 EST

• Manipulation: 01:00–07:00 EST

• Distribution: 07:00–13:00 EST
   

This indicator supports traders in identifying false breakout patterns, liquidity sweeps, and the market structure shift that often signals the real move. While not predictive, it offers structure and clarity when tracking institutional behavior across sessions.

Educational Resources and Trading Communities

Several ICT-based traders publish walkthroughs and case studies that help explain ICT PO3 entry and exit points. Notable examples include:

• Educational content from Hamza Akhtar and Ayub Rana, both of whom illustrate real chart examples using concepts like mitigation blocks, stop-loss hunting, and smart money accumulation zones.

• Community-driven platforms such as Telegram trading groups and TradingView setups also showcase how other traders apply ICT PO3 in forex, particularly on pairs like EUR/USD, GBP/USD, and XAU/USD.

Conclusion

The ICT PO3 strategy brings clarity to intraday price action by showing how smart money shapes the market. When traders learn to spot the accumulation, manipulation, and distribution phases, they begin to understand where positions are built, where traps are set, and when the real move begins.

PO3 isn’t just a way to enter trades, as it helps traders plan around structure, timing, and intent, instead of reacting to random moves. In both forex and crypto, it offers a clear way to read liquidity, avoid false breakouts, and stay aligned with how institutions trade.

It takes time to apply the model with consistency. But with practice, PO3 becomes more than a pattern. It becomes a way to follow price with purpose and confidence.