Market Structure Inducements ICT [TradinFinder] CHoch BOS Sweeps🔵 Introduction
Market Structure is the foundation for identifying trends in the market, crucial in technical analysis and strategies like ICT and SMC. Understanding key concepts such as Break of Structure (BOS) and Change of Character (CHOCH) helps traders recognize critical shifts in the market. BOS, referring to a Market Structure Change (BMS), and CHOCH or Market Structure Shift (MSS) signal trend reversals in the market.
Additionally, the concept of Inducement, a vital tool in Smart Money strategies, allows traders to avoid price traps. Identifying valid pullback, valid inducement, POI, and Liquidity Grab helps traders find optimal entry and exit points and leverage Smart Money movements effectively.
Bullish Market Structure :
Bearish Market Structure :
🔵 How to Use
The Market Structure indicator is designed to help traders better understand market structure and detect price traps. By using this indicator, you can identify the right entry and exit points based on structural changes in the market and avoid unprofitable trades. Below, we explain the key concepts and how to apply them in trading.
🟣 Market Structure
Market Structure refers to the overall pattern of price movement in the market. Using this indicator, traders can identify uptrends and downtrends and make better trading decisions based on changes in market structure. The two key concepts here are Break of Structure (BOS) and Change of Character (CHOCH).
Change of Character (CHOCH) : CHOCH occurs when the market shifts from an uptrend to a downtrend or vice versa. These changes typically indicate a broader trend reversal, and the indicator assists you in identifying them accurately.
Break of Structure (BOS) : When the market breaks a key support or resistance level, it signals a change in market structure. This indicator helps you identify these breakouts in time and take advantage of trading opportunities.
🟣 Inducement
Inducement refers to price traps set by Smart Money to trick retail traders into making the wrong trades. This indicator helps you recognize these traps and avoid unprofitable trades.
Valid Inducement : Valid Inducement refers to deliberately created price traps by major market players to gather liquidity from retail traders. Once the market has collected sufficient liquidity, it makes the real move, and professional traders use this moment to enter.
🟣 Valid Pullback
A Valid Pullback refers to a temporary market retracement, indicating a price correction within the main trend. This concept is crucial in technical analysis as it helps traders enter trades at the right time and profit from the continuation of the trend. The Market Structure indicator can identify these valid retracements, allowing traders to enter trades with greater confidence.
🟣 Point of Interest (POI)
Another important concept in market analysis is the Point of Interest (POI), referring to key price areas on the chart. POI includes zones where significant price movements are likely to occur. The Market Structure indicator helps you locate these key points and use them as entry signals for trades.
🟣 Liquidity Grab
Liquidity Grab refers to a scenario where the market intentionally moves to areas where retail traders' stop losses are placed. The goal is to gather liquidity, allowing major players to execute trades at better prices. By using this indicator, you can spot these liquidity grabs and avoid falling into price traps.
🔵 Setting
ChoCh Detector Period : The period of identifying the major market levels that occur when they break ChoCh.
BoS & Liquidity Detector Period : The period of identifying minor levels, which are used to identify BoS and Liquidity levels.
Inducement Detector Period : The period of identification of Inducement levels.
Fast Trend Detector : This feature will help you update the major market structure levels sooner.
Inducement Type Detector : Two modes "Sweeps" and "Total" can be used to identify the levels of Inducement. In "Sweeps" mode only Levels detected by touch shadow. In "Total" mode, all Levels are detected.
🔵 Conclusion
In financial market analysis and forex trading, identifying Market Structure and Inducement is crucial. Market Structure helps you detect uptrends and downtrends, and understand Break of Structure (BOS) and Change of Character (CHOCH). The concept of Inducement also enables traders to spot Smart Money price traps and avoid unprofitable trades.
The Market Structure indicator is a powerful tool that, by analyzing the market structure and concepts like valid pullback and valid inducement, helps you make more precise trade entries. Additionally, by identifying POI and Liquidity Grab, the indicator gives you the ability to spot key market zones and use them to your advantage in trading.
Inducement
LTF Inducement Levels [QuantVue]Inducement refers to a market manipulation tactic where large institutions or "smart money" create price movements that induce or lure retail traders into taking positions that are ultimately unfavorable. This concept is based on the idea that the market is moved by institutional traders who have the power and capital to manipulate prices to their advantage.
Within a dominant trend, there are frequently movements that go against the prevailing direction. These opposing moves are often driven by liquidity hunting on lower time frames. The price will experience a bounce or rejection, then aim for a previous short-term high or low before resuming its movement in alignment with the longer-term trend. Inducement involves specifically targeting these short-term highs or lows, which are potential zones where stop-loss orders may be located.
The LTF Inducement Levels indicator is designed to identify and display potential lower time frame (LTF) inducement levels on your chart. This indicator helps traders recognize price points where market manipulation might occur without needing multiple charts open.
Once a lower time frame pivot has been crossed, the level is removed from the current chart.
Multi-Timeframe Analysis:
The indicator uses a lower timeframe (LTF) to identify pivot highs and pivot lows, providing a granular view of potential inducement levels.
Configurable Parameters:
Lower Timeframe (LTF): The user can select the lower timeframe for analysis.
Pivot Length: The length used for identifying pivots.
Number of Pivots to Show: Limits the number of pivots displayed on the chart to avoid clutter.
Dynamic Pivot Management:
The indicator dynamically manages the pivots, adding new ones and removing old ones based on the configured maximum number of pivots to show.
It creates lines and labels for each pivot, which are updated as new pivots are formed or crossed.
Inducement Levels:
Pivot Highs: Marked with red lines and labeled with the price value.
Pivot Lows: Marked with green lines and labeled with the price value.
Cross Detection:
The indicator checks if the current price has crossed any of the identified pivots.
Once a pivot is crossed, the corresponding line and label are deleted.
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Liquidity Levels MTF - SonarlabThis indicator uses Pivot Points to identify Liquidity Levels in the market. Liquidity Levels are levels in the market where you would expect price to be pulled towards.
Liquidity Levels by Sonarlab also has an option to show Higher Timeframe Liquidity Levels.
Below are the indicators settings:
Liquidity Mitigation Options
The Indicator has options for you to choose what happens to the Liquidity line/boxes once it has been mitigated. Either Keep them on the chart, or remove them.
Display Styles
Choose how the levels are displayed, either with Lines or Boxes.
Set the your Extension options, by keeping the lines/boxes "short" or extend to current price, or maximum to the right
Colors and Styles
Set colors and styles for all lines and boxes
Volume SpikesShows volume spikes over a certain threshold, using a symbol's volume moving average as the baseline. Offers a few different filters regarding candle shapes and types, in an attempt to catch quick moves on extremely low timeframes (sub-1m).
Ultimately I would like to integrate this logic into an indicator that contains automated stop raid/inducement detection.
