Bull Trap

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DEFINITION of 'Bull Trap'

A false signal indicating that a declining trend in a stock or index has reversed and is heading upwards when, in fact, the security will continue to decline.

INVESTOPEDIA EXPLAINS 'Bull Trap'

A bull trap often causes some investors to buy the stock, but because the stock continues to decline after the initial signal, those who bought in are "trapped" in a bad investment.

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