Cryptoblox Technologies Inc C.BLOX

What Is a Bear Trap?

[Joseisok]

A bear trap is a technical pattern that occurs when the price action of a stock, index, or another financial instrument incorrectly signals a reversal from a downward trend to an upward trend. A technical analyst might say that institutional traders and insiders try to create bear traps as a way of tempting retail investors to take long positions. If the institutional inside trader is successful, and the price moves higher briefly, it gives the institutional inside traders the ability to unload larger positions of stock that would otherwise push prices much lower.