Bear Trap

These traps can be vicious in the way they eventually play out if you are on the wrong side of them. Aggressive traders should be on the lookout for these setups because the profits that follow can be large and quick. Bull and bear traps can be found on a fairly regular basis on daily charts, and they occur with regular frequency on intraday charts. The reason that bull and bear traps occur more on these charts is that it is easier for market makers and specialists to manipulate stocks on a short-term basis. Many short-term players let their emotions get in the way of what the long-term trend may be. The ability to recognize these opportunities will allow you to make rational choices in your trading decisions.