Imagine this: the market has been on a glorious bullish rally for weeks. Suddenly, a crack appears: a drop that seems like the long-awaited correction. The bears, smelling fresh blood, rub their hands together and launch their attacks, short selling in hopes of profiting from the collapse.
But this is where the market executes its master move. It’s a Bear Trap.
This bearish signal was a false alarm, a decoy. Just when the bears think they have victory assured, the price turns around with brutal elegance and returns to its original bullish trend. What’s the result? Bearish traders get trapped in the burrow. They sold at a low price, and now they are forced to buy back (at a higher price) to cover their positions, which, in a twist of fate, injects more fuel into the market's advance!
It's the nightmare of the bear and a reminder that sometimes the trend is your friend... until it decides to play a cruel joke on you.
Now, let's see this ambush in action on the chart. Ready to identify the signals and not be the next victim?
