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.

pattern

reversal

Complete change of direction

dead cat bounce · head fake · technical analysis · distribution · rejection · false signal · candlestick · divergence

psychology

overconfidence

Unjustified certainty in oneself

  • greedExcessive desire for wealth
  • fearEmotional response to threat
  • FOMOAcronym for exclusion anxiety

euphoria · capitulation · disbelief · hope · denial · retail investors · herd mentality · panic selling · bag holder · smart money

trading

short-sell

Profit from falling prices

exit strategy · risk management · hedge · contrarian · cut losses · margin call · entry point · timing · execution

conditions

overbought

Bought beyond fair value

Opposites
market trap direction

bull trapbear trap

Spring-loaded hunting device

short squeeze

Family

bull, trap, bulls, traps, trapped, trapping, trapper, bullish, bullock

Familiarity
Top 500,000
Profile
Used worldwide · Timeless · Negative · Rated G