Published: 15 Jul 2022 › Updated: 15 Jul 2022
LeoGlossary: Bear Trap
False selling signals are given leading investors and traders to think the upward moves are over.
A bear trap is a drop in the price of a financial asset which suddenly reverse. It baits people into giving up their long positions (and even pushing some to go short), only to continue higher.
This forces traders who are short to cover their position.
It is a situation that can happen with stocks, commodities, and cryptocurrencies.
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