STANDARD
DEVIATION + POWER
OF THREE
Mentor & Concept Credits:
Michael Huddleston + TraderDext3r
DISCLAIMER:
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Table of Contents
DISCLAIMER:
Introduction
Power of Three.
How to identify.
Standard Deviation: Accumulation
Standard Deviation: Manipulation
Standard Deviation: Manipulation Framework
Think OLHC & OHLC.
Standard Deviation: Distribution
Distribution: What do we expect?
Distribution Silver Bullet Zone
Conclusion
2
4
5
6
7
8
9
10
11
12
13
14
Introduction
This pdf will be an in-depth guide to Standard Deviations (STDv) and
Power of Three (PO3). These concepts were initially outlined/discovered by
ICT (Michael Huddleston) however have been taken further with the
independent research of TraderDext3r (MonsterLab).
I would recommend you read this pdf and
refer to Dexter’s MonsterLab Youtube video:
Core Standard Deviations + PO3 | ICT
Concepts | DexterLab to ensure you are
getting the most out of it.
Before we dive into the concepts I need to give
full credit to Dexter, please see the QR Code for
all the links to his social media. Be sure to
follow, subscribe and study his content.
Who am I?
Day trader of Indices & Forex markets
6 years trading experience
Primarily trades PO3 during NY AM session
Pairs I trade: NAS, SPX & GU
Entry Model: 4H PO3 + STDv
Student of ICT
Power of Three.
It all starts with a Power of Three, any PO3…
-
Monthly, Weekly, Daily, 4H.
Elements to a PO3
Accumulation
Manipulation
Power of 3.
Distribution
Please see this example of this Monthly PO3 which shows the Accumulation,
Manipulation & Distribution phases. This all occurs within a single candle - see
the Monthly Candle to the right of the price action. This applies to ANY PO3 candle
of your liking.
Indicator: ‘HTF Power of Three’ by toodegrees (highly recommend)
How to identify.
To take advantage of the PO3 you need to know how to identify each phase. It is
important to understand where each phase starts and finishes, when one ends
the other begins: Opening PO3 Accumulation phase starts, when it ends
Manipulation begins, once the Manipulation phase has ended we then move to
the Distribution phase. This is crucial as each phase projects the next & we
measure this using Standard Deviations!
It all starts with an Opening of any PO3 but first, here is what timeframe you
should be using to identify each phase of a PO3:
Monthly PO3 - Use 4 hour TF to identify
Weekly PO3 - Use 1 hour TF to identify
Daily PO3 - Use 15m/5m TF to identify
4H PO3 - Use 5m TF to identify
Indicators I use:
HTF Power of Three°
Daye Quarterly Theory
Standard Deviation: Accumulation
From the Accumulation phase use the highest/lowest price leg before the Market
Structure Shift in the opposing direction.
Note: During the Accumulation, the lowest discernible range measured from the
low to the high will project the Manipulation. The 2-2.5 Standard Deviation zone is
used to anticipate Reversals/Retracements.
During the Accumulation, the highest discernible range measured from the high
to the low will project the Manipulation. The 2-2.5 Standard Deviation zone is used
to anticipate Reversals/Retracements.
FIB Tool set up:
Standard Deviation: Manipulation
We anticipate the Manipulation to complete 2-2.5 Standard Deviations but some
may be asking, how do I know when this phase has finished?
1.
Use HTF POIs within the 2-2.5 STDv
2. SMT Divergence
3. Market Structure Shift
Daily PO3
00:00
5m TF
DOW 30 - SMT
1.
HTF POI (4H>) nested within 2-2.5 STDv
2. SMT Divergence with DOW 30
3. MSS
Once all of our boxes have been checked we can confirm that the
Manipulation has been completed and now anticipate the Distribution phase.
‘As one phase ends, the other begins.’
Standard Deviation: Manipulation
Framework
Once the 2-2.5 STDv has been fulfilled during the Manipulation phase you may be
confused as the HTF Power of Three indicator will visualise like so:
At this moment in time the HTF Power
of Three candle will depict a Bearish
Candle (of whichever PO3 you are
choosing to trade) but we are
anticipating that this is the
Manipulation.
Price is simply making the Low of the
OLHC.
We are expecting a Bullish Expansion within the Distribution phase.
The same applies when you are expecting a Bearish Expansion during the
Distribution phase:
In the chart above we see a Bullish candle on the HTF Power of Three indicator. We
are in the Manipulation phase, price is making the High of the OHLC.
Think OLHC & OHLC.
OLHC - Open Low High Close
OHLC - Open High Low Close
Standard Deviation: Distribution
To project the next phase, we need to know how to mark the FIB tool and where to
anchor to get an accurate projection for the Distribution.
Here’s how:
For a bullish expansion (distribution) we use the
lowest discernible price leg down before the mss.
We are using the LAST move of the Manipulation
phase that makes the lowest swing.
This move projects the Upside for the Distribution.
For a bearish expansion (distribution) we use
the high discernible price leg up before the
mss.
We are using the LAST move of the
Manipulation phase that makes the highest
swing.
This move projects the Downside for the
Distribution.
Distribution: What do we expect?
During this phase we expect price to Expand in the opposing direction of the
Manipulation phase.
We target 2-2.5 Standard Deviation as this is the ZONE for Reversals &
Retracements. However IF price closes strong above the 2.5 STDv we can
anticipate the Expansion to continue to 4 Standard Deviations.
If price fails to close above the 2-2.5 Standard Deviations we anticipate
Retracement/Reversals to the Equilibrium Range of the Current Dealing Range
from Low to High.
To know if price is either just Retracing or if it is entered a Reversal solely depends
on the Higher Time Frame premise.
The same concept applies, we can use the Highest price leg to project
Retracements & Reversals.
As seen here:
Distribution Silver Bullet Zone
We can expect Re-Accumulation/Re-Distribution within the Silver Bullet Zone
which will propel price towards 2-2.5 Standard Deviations.
What is the Silver Bullet Zone? 1-1.5 Standard Deviation = Silver Bullet Zone
This is a very powerful area because price is within its Expansion/Distribution
phase and is seeking HTF Liquidity. Within the 1-1.5 STDv we can expect a
Re-Accumulation / Re-Distribution to occur.
This zone provides an entry of opportunity, I like to wait for two scenarios to unfold.
1.
1-1.5 SBZ Retracement to Internal Range Liquidity (IRL).
-
This can be ANY IRL.
2. Higher Probability: Taking a trade from Internal Range Liquidity NESTED
within the Silver Bullet Zone.
Conclusion
We can see all 3 phases of the Power of Three and each move can be measured
with precision using Standard Deviations. I ask you to backtest this thoroughly like
I have and build a strong mind muscle connection as this will be needed to
identify moves in live conditions.
I would like to thank TraderDext3r (MonsterLab) for the research he has conducted
and his willingness to teach and share this approach with others.
Toodegrees for making excellent indicators which make this approach easy to
visualise and assist in decision making.
Of course, ICT is the author of all these concepts, so it cannot go without saying
thank you for his discoveries.
I hope this has been insightful and you can find value within this short PDF. This
was my first time creating something like this and as you can probably tell, I’m no
graphic designer. I am a trader.
Feel free to give any feedback and if you want to ask any questions you can DM
me @po3trader on X.
Thank you
-po3