What is a Bull Trap in Trading?

A bull trap is a false signal in trading that suggests a declining trend in a stock or market has reversed and is heading upwards, when in fact, the security will continue to decline. This misleading signal can lead investors to buy into the security thinking the market is on the rise, only to get trapped with losses when the prices fall again. Bull traps are often caused by temporary market recoveries during downtrends, which deceive traders into thinking a recovery is underway. Avoiding bull traps involves careful analysis of market conditions, looking beyond short-term price movements, and confirming trends through additional indicators. For an in-depth exploration of bull traps, how they occur, and strategies to detect and avoid them, you might find this guide helpful: https://paybis.com/blog/glossary/what-is-a-bull-trap/ It provides insights into recognizing market traps and making informed trading decisions.