A bull trap occurs when traders enter a long position on a currency pair when the price is rising, only for the price to reverse and move lower.

A "sucker's rally" is another name for a bull trap.

A bull trap deceives some traders into believing that the market has bottomed and that now is an excellent time to buy.

But, as it turns out, it is NOT a good time, because the price quickly reverses direction, trapping buyers in a money-losing trap.

A bull trap is a deceptive market scenario where a declining asset appears to reverse into an upward trend, luring buyers into anticipating a rally, only for the price to resume its downtrend. It typically occurs when a brief price rise breaks above a resistance level, triggering bullish sentiment and attracting buyers. However, the momentum falters, and the price reverses sharply, trapping those who bought in.

Traders often fall for bull traps due to false breakouts or overly optimistic interpretations of technical indicators like moving averages or volume surges. To avoid bull traps, traders use confirmation tools (e.g., RSI divergence) or wait for sustained price action above resistance. Risk management, such as stop-loss orders, is crucial to limit losses. Bull traps highlight the importance of skepticism and thorough analysis in volatile markets.