bull trap
Deceptive upward move
A bull trap is a false signal in financial markets where a declining asset appears to reverse and rise, luring buyers in before resuming its downward trend.
Traders who bought expecting gains find themselves trapped in losing positions: I thought the stock had bottomed out, but it was just a bull trap.
The opposite is a bear trap, where a rising asset briefly appears to fall.
Complete change of direction
- resistanceCapacity to withstand force
- whipsawTwo-person timber cutter
- fakeoutDeceptive maneuver
- dead cat bounceBrief uptick before continued decline
head fake · technical analysis · distribution · rejection · false signal · candlestick · divergence
Unjustified certainty in oneself
- greedExcessive desire for wealth
- fearEmotional response to threat
- FOMOAcronym for exclusion anxiety
- euphoriaIntense emotional high
capitulation · disbelief · hope · denial · retail investors · herd mentality · panic selling · bag holder
Profit from falling prices
- stop-lossAutomatic sell trigger
- liquidationSelling assets for cash
- sell-offRapid mass divestiture
- exit strategyPreplanned departure method
risk management · hedge · contrarian · cut losses · margin call · entry point · timing · execution
Bought beyond fair value
- overvaluedRated beyond actual worth
- low volumeReduced audio intensity
reversal
Complete change of direction
- resistanceCapacity to withstand force
- whipsawTwo-person timber cutter
- fakeoutDeceptive maneuver
dead cat bounce · head fake · technical analysis · distribution · rejection · false signal · candlestick · divergence
overconfidence
Unjustified certainty in oneself
euphoria · capitulation · disbelief · hope · denial · retail investors · herd mentality · panic selling · bag holder · smart money
short-sell
Profit from falling prices
- stop-lossAutomatic sell trigger
- liquidationSelling assets for cash
- sell-offRapid mass divestiture
exit strategy · risk management · hedge · contrarian · cut losses · margin call · entry point · timing · execution
overbought
Bought beyond fair value
- overvaluedRated beyond actual worth
- low volumeReduced audio intensity