You identify a perfect Order Block (OB). Price hits your entry, smashes through your Stop Loss, taps a level slightly lower, and *then* flies to the moon.
You were right about the direction, but you were wrong about the level. You traded the **Inducement (IDM)** instead of the real Point of Interest.
This guide will uncover the biggest trap in Smart Money Concepts and how to distinguish between a **"Trap Zone"** and a **"Pro Zone"** to fix your entry risk.
SVG 1: The Inducement Trap Flow (Bullish Example)
1. What is Inducement (IDM) and Why OBs Fail
**Inducement** is a "Near-Term High or Low" created by Smart Money to tempt traders into entering the market early. This creates a **Pool of Liquidity** (early stops) exactly where the Banks want to buy or sell.
**Rule:** If there is no liquidity sweep *before* your Order Block, the Order Block *is* the liquidity. It will be swept.
SVG 3: Structural Mapping: Inducement vs. Extreme OB
2. The "IDM" Structural Mapping (Fixing Entry Risk)
To find the real trade, you must map your structure and acknowledge the IDM as the first liquidity target.
- **Find the BOS:** Identify the break of structure (trend confirmation).
- **Find the IDM:** Mark the **First Pullback** (Low/High) created after the break. This is the **Inducement**.
- **Wait for the Sweep:** Do NOT trade the IDM. Wait for price to break **below** the IDM.
- **Look Below:** Once IDM is broken, look for the first unmitigated **Extreme Order Block** or **Fair Value Gap (FVG)** below it.
3. Strategy: Trading the "Sweep & Go"
We only enter **after** the trap has been sprung, ensuring maximum **Risk-to-Reward**.
SVG 2: The IDM Entry Model Flow (Wait for Sweep)
4. Risk Management and Discipline
Fixing your entry risk requires disciplined commitment to the Extreme OB:
- **Stop Loss:** Place your SL structurally below the **Extreme Low** that created the entire move.
- **Fixed Risk:** Risk **1% to 2%** per trade. Use the Risk & Reward Calculator to validate your setup's high RR.
- **Discipline:** If price only taps the IDM and reverses, **let it go**. We trade on our terms, not the market's terms.
Final Thoughts
Inducement is the difference between "Gambling" and "Trading". **Gamblers** jump at the first Order Block. **Traders** wait for the trap to be sprung.
Always ask yourself: **"Where is the trap?"** If you can't see the liquidity, **YOU are the liquidity**. Monitor the structural flow of the market via the Realtime Market Dashboard.
