Trap Patterns

Trap patterns — bull traps and bear traps — are among the most powerful and profitable patterns to trade, yet they are also the most psychologically challenging. These patterns form when price breaks a key level, triggering breakout traders and stop losses, only to reverse sharply in the opposite direction. The trapped traders are forced to exit at a loss, adding fuel to the reversal move. Recognizing and trading traps gives you an edge because you are essentially trading with the smart money against the crowd.