Liquidity Sweep, Change of Character, Inducement, POI Strategy

Learn a Smart Money Concepts (SMC) trading strategy using liquidity sweeps, change of character, inducement, and POI for trade entries.

Published · Updated · Methodology: SMC

Part of: Liquidity Sweeps & Grabs

  • Methodology: SMC
  • Content type: strategy
  • Timeframes: Not specified
  • Markets: Not specified

Source video

Decoded from: MODELO DE ENTRADA EN 4 PASOS by Institucional Trading Lab — watch the original

Strategy overview

A liquidity sweep is the move that runs price through an obvious high or low to trigger the resting stop orders sitting there before reversing. What distinguishes this entry is that the sweep is only the first of four steps: the video "MODELO DE ENTRADA EN 4 PASOS" from the Spanish-language channel Institucional Trading Lab presents liquidity sweep, change of character, inducement and point of interest as an ordered sequence rather than four signals that can be read in isolation.

That sequencing is the whole idea. In Smart Money Concepts vocabulary, the sweep is where liquidity gets taken; the change of character (CHoCH) is the first structural shift suggesting control has passed to the other side; inducement describes the move that pulls traders into position before the real leg begins; and the point of interest (POI) is the zone where the entry is finally looked for. Traders who learn these terms separately often end up with four independent triggers firing at different moments — the four-step framing turns them into a single checklist where each step only becomes relevant once the previous one has occurred.

The video is a conceptual entry model, not an indicator setup: no timeframe or tool is specified, which is consistent with an approach built on reading structure and liquidity directly on the chart. This page covers the concept and points to the source video, where the author walks through how the four steps connect in practice.

Topics

liquidity sweep strategy · change of character strategy · inducement trading · poi trading strategy · smc strategy · smart money concepts · trading strategy · pine script · tradingview strategy · price action strategy · ict trading

Frequently asked questions

What are the four steps in this SMC entry model?

The model is built around four Smart Money Concepts components in sequence: a liquidity sweep, a change of character (CHoCH), an inducement, and a point of interest (POI). The order is the point — each step is meant to confirm the conditions for the next.

What is the difference between a liquidity sweep and an inducement?

A liquidity sweep is the run through an obvious high or low where stop orders accumulate. An inducement refers to a move designed to pull traders into a position — often against the eventual direction — before price continues on its intended path. They describe different roles in the same story: one collects stops, the other attracts entries.

What does change of character (CHoCH) mean in Smart Money Concepts?

A change of character is the first structural signal that the side in control of price may have flipped — typically a break of the most recent swing that had been holding the previous direction. In sequenced models like this one, it is used as confirmation after liquidity has been taken, not as a standalone entry.

Is this strategy tied to a specific timeframe?

The source video does not specify one. It is presented as a structural entry model rather than an indicator-based setup, which is why traders typically apply the same four-step logic across whichever timeframe they analyze — though results will differ, so testing on your own data and market is essential before trading it.

About this strategy page

This trading strategy was decoded by Strategy Decoder's AI from a public YouTube trading video and turned into a structured, reviewable specification. In the interactive app this page shows the full entry and exit logic, risk management settings, the indicators involved with their parameters, AlgoWizard-compatible logic and a Pine Script export ready for TradingView backtesting — plus an automated backtest verdict when one has been computed for this strategy.

Strategy Decoder catalogs 2,229 decoded strategies. Each one is extracted with confidence scoring, cross-linked to the indicators it uses, and kept up to date as new videos are processed daily. Load this page with JavaScript enabled to use the interactive tools, or start from the strategy explorer to filter by methodology, market and timeframe.

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