Market StructureIntermediate#SMC#ICT
Power of 3 (PO3)
P
Definition
An informal three-part narrative sometimes applied to a selected price range, a move beyond it, and a later move in another direction. It is not a standard market-cycle model or evidence of manipulation, intended direction, or a trade setup.
Source reviewed
- CFTC: Trading system warning opens in a new tab
Supports: CFTC explains that historical-data trading systems cannot guarantee profits, supporting the distinction between a chart narrative and a verified trade outcome.
Concept Diagram
Key Takeaways
1
PO3 is an informal chart narrative, not a standardised intraday market-cycle model.
2
State the session, range, thresholds, price source, and invalidation rule before examining the outcome.
3
A sequence does not prove stop concentration, institutional intent, manipulation, a true direction, or a reversal.
4
Test a complete executable rule out of sample; PO3 is not a roadmap or trading instruction.
Practical Example
A researcher defines a session range and thresholds before the day begins. Price later moves below the range and then rises. The researcher records the full path and execution conditions, then compares the same pre-defined rule with a benchmark in later sessions. They do not call the lower move manipulation, assume stops were triggered, or treat the later rise as a pre-known true direction.
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Related Terms
Market Structure
Wyckoff TheoryA historical chart-analysis framework that groups price action into labels such as accumulation, markup, distribution, and markdown. These labels are interpretations of a selected chart, not proof of participant identity, intent, or a future move.
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Inducement (IDM)An informal chart label for a local move followed by a failed breakout or reversal. The chart alone cannot establish that it was designed to induce a trader or that any participant intended the outcome.
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Order Block (OB)An informal chart zone, often drawn from a candle or range preceding a later move. It does not identify an order, its owner, its size, or an institutional entry point.
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DisplacementAn informal chart label for a rapid directional move over a chosen interval. It does not establish institutional intent, participation, or the future direction of price.
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