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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 now heading [[Bull market|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 now heading [[Bull market|upwards]], when in fact, the security will continue to decline. |
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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. |
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. |
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Revision as of 00:20, 6 August 2013
In economics, 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.
See also
References
Look up bull trap in Wiktionary, the free dictionary.