Lesson 10Power of three, AMD and the Judas swing

Power of three, AMD and the Judas swing

Lesson 10 · 5 min read · By DT Terminal

Read a day as accumulation, manipulation and distribution, and write the Judas swing as a rule you can apply while it happens.

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Chapter 1 of 6

One candle, three phases

Power of three (PO3) reads a daily candle, or a session or a weekly one, as three phases in a row:

  • Accumulation: a quiet range near the open.
  • Manipulation: a move against the day's eventual direction that takes liquidity.
  • Distribution: the main move.

Traders shorten it to AMD. On a bullish day the low tends to form early and the close near the high; a bearish day is the mirror. The idea overlaps with Wyckoff's much older accumulation, distribution, spring and upthrust.

Bullish dayone daily candle, and the path that made it
Daily candleOpenAMD
Chapter 2 of 6

The reference: the midnight open

ICT treats the price at 00:00 New York as the day's "true" open. On a bullish PO3 day the manipulation leg trades below it and the distribution finishes above it. On a bearish day, the reverse.

It follows US daylight saving: 05:00 UTC in US winter, 04:00 UTC in US summer. Set your chart to New York time, or convert once per season. The windows around it come from The ICT clock: sessions and killzones.

Chapter 3 of 6

The Judas swing

The Judas swing is the manipulation leg at a session open: a false move away from the midnight or session open that runs stops, then reverses. Traders mark the obvious levels it could reach for: the Asian range, or the quiet range after midnight.

It is a sweep in the sense of Liquidity the ICT way: a wick beyond a known low, then a close back. If price closes beyond and keeps going, it was a run, not a Judas swing.

ICT describes the move as deliberate. Nothing public shows who is behind it, so this lesson only uses what you can see: the level, the wick and the close.

Chapter 4 of 6

Bullish and bearish AMD days

Here are three ways a day can open, bullish and bearish. Only the top row is power of three as written. The middle row is a perfectly normal day the model has nothing to say about, and the bottom row is the one that traps a buyer.

Power of three

AMD days, and the days that only look like them

  • Quiet range (A)
  • The open

Bullish day

low early, close near the high

Bearish day

high early, close near the low

Textbook AMD

quiet open, a false move, then the run

AMDOpen
AMDOpen

Trend from the open

no false move: the low is the open

DOpen
DOpen

The false move kept going

no close back over the open

AMDOpen
AMDOpen
Cover the right half of each cell. At the moment price first trades under the open, the top row and the bottom row look the same.
Schematic candles, not market data. A, M and D mark accumulation, manipulation and distribution.

That is the hindsight problem. Every finished daily candle can be told as PO3, so a pile of finished charts proves nothing. The test is whether you can name the manipulation leg while it is happening.

Chapter 5 of 6

Write it as a rule

A testable Judas swing, on M15 and New York time: price trades below the midnight open and below the low of the quiet range from 00:00 to 02:00, then an M15 candle closes back above the midnight open before 05:00. Both parts, or it is not one.

Worked example

Example 01: EURUSD M15: the rule says Judas swing

The worked example, with every number walked through, is in the app.

Go deeper

In Example 01 the drop reached 1.08440, and the 03:45 candle closed at 1.08702, just back above the open.

Chapter 6 of 6

When the rule says no

Same rule, same start. It never fires.

Worked example

Example 02: GBPUSD M15: the same start, no Judas swing

The worked example, with every number walked through, is in the app.

Call it bar by bar in the backtester

Replay twenty days of one pair on M15 from 00:00 New York. At 05:00, call Judas or not, then play on.

Tag the trades that used it

Tag trades after a Judas swing Judas, and drops that missed the rule No reclaim.
Go deeper

In the backtester, check afterwards how many Judas days closed above the open. In the Trade Log, filter by each tag after a month and compare the two in R.

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