Bull trap

In stock market trading, a bull trap is an inaccurate signal that shows a decreasing trend in a stock or index has reversed and is now heading upwards, when in fact, the security will continue to decline.

It is seen as a trap because the bullish investor purchases the stock, thinking it will increase in value, but is trapped with a poor performing stock whose value is still falling.

See also

• Boom and bust
• Dead cat bounce
• Economic bubble
• Market trend
• Speculation
• Stock market bubble

References

• Setting the Bull Trap (investorinsight.com)
• Don’t Fight a Bull Trap (stocks-simplified.com)