Bull Trap

A bull trap is a false signal that makes a stock look like it's about to rise, but then it drops instead. You'll hear this term when analyzing price charts and market momentum—it matters because falling for one can cost you real money. The trap happens when a stock breaks above a resistance level (a price point where it typically gets pushed back down), attracting buyers who think an uptrend is starting. But the buying pressure fizzles out, and the price reverses sharply downward, leaving those new buyers holding losses. For example, if TechCorp stock breaks above $50 and climbs to $52, only to crash back to $45 the next day, that was a bull trap. It's a reminder to wait for confirmation before jumping in.