Bear Trap

A bear trap is a technical pattern that occurs when the performance of financial instruments incorrectly indicates a reversal of a rising price trend. Bear Trap tricks investors into stopping their upward trend and those investors who fall into the bear trap will often sell at that time, fearing a future falling in price. By then, traders who set the trap will enter the market again and buy at a low price. Once the trap is released, the false bear market will reverse and the value will flatten or even rise.