Inducement Tracker
Identifies inducement zones—price levels designed to lure retail traders into bad positions before smart money reverses the market and sweeps their stops.
What It Does
The Inducement Tracker detects inducement—areas where price briefly breaks structure to attract retail traders, only to reverse sharply and trap them. These are classic liquidity traps used by institutional players.
Unlike basic liquidity sweeps, inducement zones show you where the trap is being set before it happens. When price enters these zones and reverses, you can trade with smart money instead of against them.
Key Features
Liquidity Trap Detection
Automatically identifies price levels beyond swing highs/lows where retail traders get trapped.
Reversal Zone Marking
Highlights zones where price is likely to reverse after inducing retail positions—perfect for contrarian entries.
Bullish & Bearish Inducement
Tracks both upside and downside inducement—catching retail longs and shorts getting trapped.
Alert Notifications
Set alerts when price enters inducement zones—catch traps as they unfold in real-time.
Main Settings
| Setting | Default | Description |
|---|---|---|
| Swing Length | 15 | Bars used to identify swing highs/lows for inducement zones |
| Extension Pips | 10 | How many pips beyond swing to mark inducement zone |
| Show Trapped Zones | true | Highlight zones after inducement occurs (for review) |
| Enable Alerts | false | Alert when price enters inducement zones |
How to Use This Indicator
1. Identify the Inducement Zone
The indicator marks zones just beyond swing highs/lows—areas where retail traders expect breakouts or breakdowns.
2. Wait for Price to Enter
When price pushes into the inducement zone, retail traders pile in expecting continuation—this is the trap being set.
3. Watch for Reversal
If price fails to sustain above/below the inducement zone and reverses sharply, that is your signal to trade with smart money.
4. Combine with Order Blocks
The strongest setups occur when price induces retail, then reverses into an order block or FVG. Stack your confluence.
Pro Tip: Use with Liquidity Sweep Detector
Inducement often leads to liquidity sweeps. Use the Liquidity Sweep Detector to confirm when retail stops are being raided after the trap.
View Liquidity Sweep Detector →Installation Instructions
Download the Pine Script file
Click the download button above
Open TradingView Pine Editor
Go to TradingView → Open chart → Pine Editor tab
Paste and save
Paste code → Save → Add to chart
Enable alerts (optional)
Configure TradingView alerts for inducement zone entries
Stop Getting Trapped by Smart Money
This indicator shows you where inducement zones are, but timing the reversal is still tricky. AI PIPS sends you ready-to-trade signals that catch these traps with perfect timing.
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