6 The Model

Summary

The Money Glitch Model is a trading strategy built on market liquidity and inducement. It focuses on identifying liquidity buildups, where early traders are induced to buy and sell, and then clearing that liquidity to shift the market direction. The model consists of three steps: 1) Buildup of liquidity, 2) Trap move and clearing liquidity, and 3) Placing the entry. Key concepts include Inducement Highs and Lows, which serve as critical levels for traders to enter the market. Understanding liquidity movements allows traders to make informed decisions, buying and selling at optimal points for profit.

Takeaways

• 😀 The Money Glitch Model is a system designed to exploit market liquidity, based on three main steps.
• 😀 The first step in the Money Glitch Model is the buildup of liquidity, which identifies where early traders are induced into the market.
• 😀 Liquidity buildup can be identified through four methods: Trend SL Channel, Breakout Buildup, Break and Retest, and Smart Money Concepts.
• 😀 The second step is the Trap Move, which involves clearing liquidity to create an opportunity for trading in the opposite direction.
• 😀 After the liquidity is cleared, traders can move in the opposite direction to profit from the market shift.
• 😀 The third step is placing the entry, which occurs after the liquidity is cleared, with buy entries below the lows and sell entries above the highs.
• 😀 Inducement High and Inducement Low are crucial concepts that define key levels for entry, based on the liquidity buildup and clearance.
• 😀 Inducement High occurs when the market moves down, forms a buildup, and then clears the liquidity below, signaling an opportunity to buy towards the inducement high.
• 😀 Inducement Low happens when the market creates a low, followed by a buildup and liquidity clearance, signaling an opportunity to sell towards the inducement low.
• 😀 The success of the model relies on correctly identifying the buildup, clearing of liquidity, and using inducement levels to find optimal entry points.

Q & A

What is the primary concept behind the Money Glitch Model?

The Money Glitch Model is based on the idea of liquidity being induced into the market. It involves the market influencing traders to buy and sell, which in turn induces movements to balance liquidity, allowing for continued market direction.

What is meant by 'inducement' in the context of the market?

Inducement refers to the market's ability to persuade or influence traders to buy or sell by creating conditions that drive their actions, such as triggering early buyers or sellers.

What are the three main steps of the Money Glitch Model?

The three main steps are: 1) Buildup of liquidity, 2) Trap move clearing liquidity, and 3) Placing the entry.

What does the 'buildup of liquidity' refer to in the model?

The buildup of liquidity refers to identifying where early traders are being induced into the market, which can happen through various patterns such as Trend SL Channel, breakout buildup, break and retest, or smart money concepts.

Why is the buildup of liquidity so important in the Money Glitch Model?

The buildup is crucial because without it, the entire model becomes invalid. The buildup signals the presence of induced market participants, which is necessary for the next steps to follow in the strategy.

What is a 'Trap move' in the context of the Money Glitch Model?

A Trap move is a market move that clears liquidity, often by inducing traders to take positions that are then 'swept,' creating an opportunity to trade in the opposite direction after liquidity is cleared.

How does liquidity clearing provide an opportunity to trade?

Once liquidity is cleared after the buildup, the market is often primed for a reversal, and traders can take positions in the opposite direction toward higher liquidity areas, such as previous highs.

What is the correct entry strategy after liquidity has been cleared?

After liquidity is cleared, the entry strategy involves buying below the cleared low or selling above the cleared high, often using liquidity blocks for a more precise entry.

What is an 'Inducement High' and how does it affect trading decisions?

An Inducement High is the high point reached after the market has induced early buyers and cleared liquidity. It is a key point for making trades, as it often represents a reversal zone where traders can enter positions toward lower points.

What role does the Inducement Low play in the model?

The Inducement Low is the low created after a buildup and liquidity sweep. It acts as a key reference for trades, where traders can sell above the high that resulted from the liquidity-clearing move, targeting the Inducement Low.