Market StructureIntermediate#SMC#Liquidity
Inducement (IDM)
I
Definition
A minor pullback or structural point designed to 'induce' retail traders to enter too early before a real institutional move.
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Concept Diagram
Key Takeaways
1
Inducement is a deliberate price move that tricks retail traders into entering premature positions
2
It creates false breakouts above previous highs or below previous lows to trap traders
3
Once trapped, price reverses and runs to the true liquidity pool in the opposite direction
4
Recognizing inducement prevents entering trades that are designed to be stopped out
Practical Example
BTC breaks slightly above resistance at $65,500 (inducement), trapping breakout traders who go long. Price then immediately reverses and drops to $62,000 where the real buy-side liquidity sits — stopping out the trapped longs.
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Related Terms
Market Structure
Liquidity GrabA engineered move to trigger stop losses above/below obvious levels to fill institutional buy/sell orders.
Market Structure
Power of 3 (PO3)A market cycle concept consisting of three distinct phases: Accumulation, Manipulation, and Distribution.
Market Structure
Mitigation BlockA failed order block that didn't hold price but now acts as a future support or resistance level.
Market Structure
Breaker BlockSimilar to a mitigation block, but it involves a stop hunt (liquidity grab) before the structure is broken.
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