Bull Trap β The False Breakout Danger β οΈπ
π A Bull Trap happens when prices appear to break out above a key resistance level, luring buyers in β only to reverse sharply lower.
β
Key Signs:
Strong green breakout candle above resistance.
Sudden rejection next session with red candle closing below breakout level.
Volume spike on breakout day, followed by immediate selling.
β
Meaning: Smart money exits while retailers buy.
Result β trapped buyers and a quick down-move.
π Example: Stock breaks βΉ980 resistance and hits βΉ1,010, next candle opens lower and closes βΉ970 β Bull Trap β bearish reversal confirmed.
π§ Tip: Always wait for a confirmed close above resistance for 2β3 sessions before entering.
INDIGOPNTS
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