BOS,CHoCH & INDUCEMENT In SMC | HINDI | BANKNIFTY| LECTURE~3

BOS, ChOCH & INDUCEMENT In SMC | HINDI | BANKNIFTY | LECTURE~3 - Notes

1. Summary:

This YouTube video, part of the "Guardeer" channel's Smart Money Concepts (SMC) series, focuses on Structure Mapping. The video breaks down the core components of Structure Mapping: Break of Structure (BOS), Change of Character (CHoCH), and Inducement (IDM). It explains how these elements work together to identify market structure, understand trend continuations, and recognize potential reversals. The video emphasizes the importance of Body closing of Candlesticks for BOS & CHoCH and the difference between VALID & INVALID Inducement

2. Key Takeaways:

* **Structure Mapping:** A method to understand market structure using BOS, CHoCH, and IDM.

* **BOS (Break of Structure):** Occurs when price breaks the previous higher high in an uptrend or the previous lower low in a downtrend, continuing the trend. Valid BOS requires a Body Closing of the candle

* **CHoCH (Change of Character):** Signals a potential trend reversal. It occurs when price breaks a key level (e.g., a Higher Low in an uptrend or a Lower High in a downtrend). Requires Body Closing

* **IDM (Inducement):** A level where price is "induced" to move in a specific direction (the first swing after a break, also know as a liquidity grab). In an uptrend, it occurs on the left of the previous BOS and in a downtrend occurs on the right of the BOS .

* **Valid vs. Invalid Swings:** The video stresses the importance of identifying valid and invalid swings for identifying the correct levels of BOS, CHoCH & IDM.

3. Detailed Notes:

**A. Introduction (0:00:00 - 0:00:22):**

* The video is the third lecture in a series on SMC.

* Viewers are advised to watch the previous two lectures first for context.

* Focuses on Structure Mapping: BOS, CHoCH, and IDM.

**B. Structure Mapping Overview (0:00:22 - 0:00:49):**

* Structure Mapping consists of three main components:

* Break of Structure (BOS)

* Change of Character (CHoCH)

* Inducement (IDM)

* The video will explain each point step-by-step.

**C. Break of Structure (BOS) (0:00:49 - 0:05:10):**

* **Uptrend BOS:**

* Price moves up, creating a high and drops.

* The price breaks the previous high. This is BOS.

* When price continues to break the previous highs in an uptrend, BOS occurs.

* **Downtrend BOS:**

* Price moves down, creates a low, and retraces.

* The price breaks the previous low. This is BOS.

* When price continues to break the previous lows in a downtrend, BOS occurs.

* Body Closing must occur above or below the high / low to be a valid BOS

**D. Change of Character (CHoCH) (0:05:10 - 0:08:19):**

* CHoCH signals a trend change.

* It occurs when an uptrend's higher low is broken.

* **Example:** Price makes higher highs and higher lows. When the higher low is broken, CHoCH has occurred.

* CHoCH is a turning point; BOS is a continuation pattern.

**E. BOS vs. CHoCH (0:08:19 - 0:09:49):**

* CHoCH indicates that the trend is changing.

* BOS is a continuation pattern.

* Important to note that CHoCH is considered a turning point to down trend.

**F. BOS and CHoCH Rules (0:09:54 - 0:12:27):**

* **BOS and CHoCH Validation:** Body closing of the candle is required for both BOS and CHoCH.

* **Week Sweep:** A wick (shadow) that doesn't close above a high (in a BOS) or below a low (in a CHoCH) indicates a liquidity grab, not a valid break.

* Validating BOS and CHoCH.

**G. Introduction to IDM (0:12:27 - 0:12:59):**

* Introduction of a question, "Why price reverses after the CHoCH"

* The answer is IDM (Inducement).

**H. Inducement (IDM) Explained (0:25:21 - 0:28:54):**

* IDM is when price is induced to move in a specific direction.

* **In an Uptrend:** The first swing after the BOS to the Left of the boss and is identified as IDM

* **In a Downtrend:** The first swing after the BOS to the Left of the boss and is identified as IDM

* The IBDM is the location from where future structure mapping will take place.

**I. Highs, Lows, BOS, and CHoCH (0:28:54 - 0:30:34):**

* Reiteration of identifying IBDM, CHoCH & BOS

**J. More Deep Explanation of IBDM (0:30:34 - 0:31:44):**

* In a uptrend, for the real higher highs, you need IDM

**K. IBDM, BOSS and How they play out in Down Trend (0:37:44 - 0:38:59):**

* **In a Down Trend:** The first swing after the BOS to the Left of the boss and is identified as IDM.

* The IBDM is the location from where future structure mapping will take place

**L. The Rules Of Valid IBDM (0:39:19 - 0:41:09):**

* In an Uptrend IBDM must be from the left side.

* In a Downtrend IBDM must be from the left side.

* The Body closure should occur on the downside for a down trend and vice versa.

**M. Chart Breakdown of BOS & CHoCH in Trading (0:41:09 - 0:48:46):**

* Identifying the market structure with BOS, CHoCH and IBDM

* Marking the high/low correctly

**N. How to use a Correct IBDM (0:48:46 - 0:52:17):**

* Explain how to structure map and mark IBDM

**O. How to use and Identify Correct IBDM (0:52:17 - 0:53:05):**

* How to use and Identify IBDM

**P. Valid & Invalid Swings (0:57:55 - 0:59:48):**

* Valid and Invalid IBDM are explained in the video.

**Q. Invalidation (0:59:48 - 0:59:59):**

* An invalid IBDM

**R. Conclusion**

* Summary of key topics.

* Encouragement for viewers to continue learning and practicing.

* Request for a "like" to boost the video's visibility.