Prices rarely move in a straight

Indirect (incentive)

Prices rarely move in a straight line. There is almost always an opposite trend movement within a larger trend. This opposite trend movement is the result of liquidity hunting in lower timescales. The price targets the previous short high or low before rebounding or resisting, and then continuing in the same direction as the long-term trend. Indirections specifically refer to targeting these short highs or lows into areas where the stop can be located.

As we know, liquidity exists where stop orders are concentrated, and once these stops are removed, the price may continue to move in the previous direction. For traders accustomed to using chart patterns, Induements can be seen in bull flag and bear flag pattern formation.

- Price Zigzags: Even within a big trend, there are small opposing movements.

- Indenture: A "bait" move aimed at a stop loss set near a short high/low, pretending to move in opposition to a big trend.

- Liquidity Hunting: A move to attack where the stop loss is concentrated, pop a spell, and use it as a springboard to move in the original trend direction.

- Chart patterns: Indentations are commonly referred to as "bul flag" or "bear flag" patterns.

Let's say it's an upward trend in the long run. Prices continue to rise, but there are periods of temporary declines in the middle. At this point, in the short-term downtrend, some traders take a short position because they think the trend has changed, and set up a stop loss near the recent high.

However, this drop could be an "incentive," or "incentive." The big players can use this short-term drop to burst the stop loss of individual investors and try to get a buy at a lower price. After the stop loss absorbs the sell-off, the price returns to its original upward trend.

Key to:

Indenture is a temporary counter-movement within a large trend, a strategy aimed at stop-loss near short highs/lows.

"Smart Money" wants to get liquidity through Indenture and move prices in their favor.

Understanding the Indenture helps you identify the movement of "smart money" without betting on a trend reversal prematurely.

In conclusion, Induction can be an important clue for figuring out the true trends without being deceived by market tricks.