{"id":660426,"date":"2025-06-06T15:00:41","date_gmt":"2025-06-06T13:00:41","guid":{"rendered":"https:\/\/ftmo.com\/?p=660426"},"modified":"2025-06-06T15:27:35","modified_gmt":"2025-06-06T13:27:35","slug":"how-the-candles-form-on-the-chart-from-amds-perspective","status":"publish","type":"post","link":"https:\/\/ftmo.com\/en\/how-the-candles-form-on-the-chart-from-amds-perspective\/","title":{"rendered":"How the candles form on the chart from AMD’s perspective"},"content":{"rendered":"
Last time, we showed how to identify the three key phases of the market cycle \u2014 accumulation, manipulation, and distribution – and why understanding them is essential for every trader. Today, we’ll explore how these phases shape individual candles on the chart and how the AMD approach can help refine trade entry timing.<\/em><\/p>\n A candle on a chart is not just a simple visualization of the opening and closing price – it is an imprint of price action<\/strong> that often reflects the entire market story.<\/p>\n For example, a single daily (D1) candle may contain a whole sequence of events on a lower timeframe (e.g. M15) that correspond to the different AMD phases:<\/p>\n Each candle, therefore, conceals a structure of market behavior<\/strong> that can be better identified on lower timeframes. This enables a more comprehensive understanding of the market – not only by analyzing the shape of the candle but also by recognizing the intention<\/strong> behind its formation.<\/p>\n When using top-down analysis<\/strong>, the trader first observes the market structure on higher timeframes (e.g., W1 or D1) to get the overall context. They then move to lower timeframes (e.g., H1, M15) to look for specific price reactions and signals<\/strong> within each AMD phase.<\/p>\n For example:<\/span><\/p>\n This approach to trading helps align your view of market developments across multiple levels<\/strong> – enabling you to benefit from the broader context while smartly timing entries where they make the most sense.<\/p>\n Novice traders often make the mistake of trying to identify accumulation, manipulation, and distribution in every candle or price movement<\/strong> – regardless of market context. It’s important to remember that AMD phases do not occur mechanically; they emerge as a result of market psychology and the intentions of larger players<\/strong>.<\/p>\n If the market is not in an environment suitable for liquidity creation (e.g. no prior consolidation or low volume), the recognition of these phases can be misleading.<\/p>\n Another common mistake is entering too early – either during the accumulation phase or in the middle of manipulation<\/strong>. Instead, it\u2019s often better to wait for confirmation of the distribution<\/strong> phase – for example, through a change in market structure, a price move back into the range, or a reaction to an order block.<\/p>\n Want to see how the AMD phases relate to candles on a higher timeframe? Open the EUR\/USD pair on the M15 and D1 timeframes. Select one significant daily candle and analyze its internal structure on the M15 chart:<\/p>\nEach candle has its own story<\/h2>\n
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Top-down approach and more accurate entries<\/h2>\n
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The most common mistakes when reading candlesticks from an AMD perspective<\/h2>\n
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How to check this on a chart (practical tip)<\/h2>\n
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