The Power of Three Model
Written by
A Sign Of Time
Head of Education & Toodegrees Analyst
Key Summary
- The model describes accumulation, manipulation, and distribution.
- Accumulation builds liquidity.
- Manipulation triggers stop orders.
- Distribution produces the directional move.
Description
The Power of Three model describes a sequence in which markets transition through three phases. During accumulation, price moves sideways while orders build around range highs and lows. Manipulation occurs when price briefly breaks the range to trigger stops. The distribution phase follows as price expands strongly in one direction.
Key Questions
A framework describing accumulation, manipulation, and distribution phases.
Price briefly moves outside the range to trigger stop orders.
The market moves strongly in one direction after liquidity is accessed.
Power of Three Phases
| Phase | Description | Purpose |
|---|---|---|
| Accumulation | Sideways range | Build liquidity |
| Manipulation | False breakout | Trigger stops |
| Distribution | Directional expansion | Trend development |
The accumulation-manipulation-distribution sequence is widely discussed in modern price-action analysis.
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