Inducement trading is a price-action approach that reads how smart money lures retail traders into the wrong side of the market before a real move...

Inducement trading is a price-action approach that reads how smart money lures retail traders into the wrong side of the market before a real move unfolds. An inducement forms when price creates tempting signals—equal highs/lows, a fake breakout, or a shallow pullback—near obvious liquidity pools. Once that liquidity is harvested, institutions often reverse price, leaving trapped positions and clean directional imbalances. By waiting for the sweep, a market structure shift, and refined entries around fair value gaps or order blocks, inducement traders align with the move that follows the trap rather than the trap itself. This method can improve timing, reduce false entries, and tighten risk, but it demands patience, multi-timeframe context, and strict risk management. On this page, you’ll learn how to spot inducements, confirm them with smart money concepts (SMC), and build rules that fit your plan. Whether you swing trade or scalp, understanding inducement dynamics helps you avoid being bait—and capitalize on the momentum engineered by liquidity events.

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