INDUCEMENT

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INDUCEMENT

Inducement simple meanings Deceiving. It induces traders to think the market has
made the call for entry and ends up liquidating their orders there before moving
to same direction.
Liquidity is in every low and high but Inducement is not in every low and high.

3 Types of Inducement Model


1. Type one Inducement
2. Type Two Inducement
3. Type three Inducement
They all don’t appear in all structure you get to see one or two or three in a
structure for your interest.

Type One (1) Inducement Model


The first inducement model is based on narrative, after a continuation pattern is
formed price will retrace higher or lower to grab liquidity before going to the
opposite direction
Reason is because BUYERS / SELLERS thinks the price will come and take back
that level because of the buy stops and sell stops that are below the low or high.
 NOTE
BULLISH
So when price get to the extreme level low that made the BOS it will
make a high and then still break the higher low (Inducement type 1) and
hit our extreme point to merge the buyers to continue up.

BEARISH
So when price gets to the high that started the expansion to make the
BOS, price will before then create a low and goes back to break the lower
high (Inducement type 1) and then price hit our extreme point to merge
the sellers for a short.

Type Two (2) Inducement


The narrative is based on inducement price, Doesn’t need to deliver a
continuation pattern before forming rather it will induce traders, making them
think price wants to push higher or lower and then taps into a reference point and
move down or up to take their stop-loss for sell or buy
When price moves your question will be how? What was the method did the price
use and expand or retrace.
 We expect Type 2 IDM, if it makes a straight up Expansion and retracement
to our fair value structural POIs.
 When it comes to our Fair Value POIs, it has two scenarios in which it forms
Scenario 1:

Scenario 2:
Type three (3) Inducement
The third type is little beat similar to the first just that it makes a pull back before
breaking structure, most traders will put their stop loss at the pullback high as we
know most traders place their stop loss above old highs no price moves up to take
out their stop loss before it continues the down move

JARA
ORDER-PAIRING
 Continuation OP
 Retracement OP

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