🐻 Bear Trap · Invest & Retire Community

🐻 Bear Trap

🐻 What is a bear trap? It's a price movement that appears to be the start of another bearish wave, but in reality, it's the very beginning of an uptrend.

📉 Sellers get confused and think another plunge is incoming. All this happens while the price is skyrocketing above recent resistance levels, collecting liquidity on the way.

✅ When you see a bear trap, the best you can do is to buy at the retest of the resistance levels that used to be a support. Look for confirmation on smaller timeframes or seek reversal candlestick patterns.

❌ Your Stop Loss should be below the support (fakeout), as shown in the figure. Take-profit levels can be forecasted via Fibonacci levels, or you can place them near a distant resistance level.

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