Difference between revisions of "Bull trap"

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<center>''«What a man does not understand, he does not possess.»''<br>(Wolfgang Goëthe)</center>
 
<center>''«What a man does not understand, he does not possess.»''<br>(Wolfgang Goëthe)</center>
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A bull trap is a false upward movement that temporarily pushes price out of a congestion area. Investors buy shares on the congestion breakout, but then price quickly reverts itself going back again under the level that was earlier violated.
 
A bull trap is a false upward movement that temporarily pushes price out of a congestion area. Investors buy shares on the congestion breakout, but then price quickly reverts itself going back again under the level that was earlier violated.

Revision as of 20:34, 18 November 2014

«What a man does not understand, he does not possess.»
(Wolfgang Goëthe)


A bull trap is a false upward movement that temporarily pushes price out of a congestion area. Investors buy shares on the congestion breakout, but then price quickly reverts itself going back again under the level that was earlier violated.

Candlestick analysis provides quite a good help in qualifying the nature of price movements and it proves to be very useful in pinpointing bull traps.

Bull trap.jpg

See also: