Business
What is a bear trap in trading and how to avoid it? By Cointelegraph
What is a bear trap in trading and how to avoid it?
A difficult proposition for beginner traders, bear traps can be realized using the charting tools available on most trading platforms and should be exercised with caution.
In most cases, identifying a bear trap requires the use of trading indicators and technical analysis tools such as RSI, Fibonacci levels, and volume indicators, and these are capable of confirming whether a reversal is possible. Is the trend after a period of consistent price going up correct or merely inviting shorts.