Inducement

What it is

Inducement is a minor swing high or low that forms just before price reaches a better zone. Traders who buy at that minor low get stopped out when price dips through it into the real zone, and those stops become fuel for the move.

How to spot it

• A small pullback low sitting just above an order block or FVG.
• It's the obvious place to enter, which is the point.

How to use it

• Wait for the inducement to be swept, then look for the entry at the deeper zone.
• If price reverses from the inducement without reaching the zone, let it go.

Common mistakes

• Entering on the first small pullback.
• Putting the stop right under the minor low, where it will be taken.

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