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In stock market trading, a bull trap is an inaccurate signal that shows a decreasing trend in a stock or index has reversed and is now heading upwards, when in fact, the security will continue to decline.

It is seen as a trap because the bullish investor purchases the stock, thinking it will increase in value, but is trapped with a poor performing stock whose value is still falling.

References

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-A '''Bull Trap''' is in [[economy|economy context]] an untruthful signal that shows a lessening trend in a stock or index has reversed and is heading upwards when, in fact, the security will continue to decline.
+In stock market trading, a '''bull trap''' is an inaccurate signal that shows a [[Bear market|decreasing trend]] in a [[stock]] or [[Index (economics)|index]] has reversed and is now heading [[Bull market|upwards]], when in fact, the security will continue to decline.
-This ploy supposedly indicates that is reversing its path, and is starting to rise instead of decline, but in actuality the security continues to decline after this signal is seen. It is seen as a trap because the outcome makes concede this signal to purchase the stock by the credence given the benefit from this increase in value, but it's trapped with a poor performing stock when they find out that the stock is still falling.
+It is seen as a trap because the [[bullish]] investor purchases the stock, thinking it will increase in value, but is trapped with a poor performing stock whose value is still falling.
-== References ==
-* Setting the Bull Trap (investorinsight.com) [http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/2009/01/07/setting-the-bull-trap.aspx]
-* Don’t Fight A Bull Trap (stocks-simplified.com) [http://www.stocks-simplified.com/Bull_Trap.html]
+== See also ==
 {{Portal|Business and economics}}
+*[[Boom and bust]]
+*[[Dead cat bounce]]
+*[[Economic bubble]]
+*[[Market trend]]
+*[[Speculation]]
+*[[Stock market bubble]]
+== References ==
 {{Wiktionary}}
+* [https://web.archive.org/web/20110514095328/http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/2009/01/07/setting-the-bull-trap.aspx Setting the Bull Trap (investorinsight.com)]
+* [https://web.archive.org/web/20100214055853/http://www.stocks-simplified.com/Bull_Trap.html Don’t Fight a Bull Trap (stocks-simplified.com)]
+[[Category:Behavioral finance]]
+[[Category:Business cycle]]
+[[Category:Stock market]]
+[[Category:Financial crises]]
+{{business-stub}}
-[[Category:Economies| ]]
-[[Category:Economics]]