Bear Trap
A false breakdown below support that lures sellers in, then snaps back up and leaves them trapped in…
In plain English
A false breakdown below support that lures sellers in, then snaps back up and leaves them trapped in losing shorts.
In a bear trap, price dips through a level everyone is watching. Sellers pile in, sure the floor has broken. Then price reverses and rips back above it, and those shorts scramble to buy back, often pushing it even higher.
It is a kind of fakeout. Waiting for a candle to close beyond the level, or for a retest, can filter some traps. Its twin is the bull trap.
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