What mostly tends to happen in a bull trap situation is that you may have bought a breakout of a resistance level thinking that price was going to go up. A typical examples of bull traps you will see are price breaking resistance levels and shooting up but this is not for long , after that the price tumbles sharply back down.
The problem though is that sometimes you just don’t know how high the price will go up before it falls back down.
Topic: What exactly is a bull trap and is there one now (Read 101 times)
Bull traps are false signals that often appear when there's a downtrend and it appears as if it has reversed when ultimately, the trend is still going downwards. This is to trigger some form of buying action from the side of hopefuls, and after a certain point, the price will be brought down by a massive sell-off. It happens a lot, and sometimes when there's an obvious downtrend, these false signals appear to take some extra profit before the bears continue on pushing the price downward.
I keep reading about bull traps. Does this mean that the price is being pumped up by whales to make people think the price will go up and lot and then it doesn't go up but falls . Is that what's happening now? Thanks.
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