Bull trap: Difference between revisions

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In economics, a Bull trap is an inaccurate signal that shows a decreasing trend in a stock or index has reversed and is 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

Setting the Bull Trap (investorinsight.com) [1]
Don’t Fight a Bull Trap (stocks-simplified.com) [2]

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-{{Wikify|date=May 2011}}
 {{Orphan|date=May 2011}}
-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 [[economics]], 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 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.
 == See also ==