What is a bear trap in trading and how to avoid it?
Cointelegraph
Published Jun 18, 2022 07:00PM ET
Updated Jun 20, 2022 12:20PM ET
As a difficult proposition for novice traders, a bear trap can be recognized by using charting tools available on most trading platforms and demands caution to be exercised.
In most cases, identifying a bear trap requires the use of trading indicators and technical analysis tools such as RSI, Fibonacci levels, and volume indicators, and they are likely to confirm whether the trend reversal after a period of consistent upward price movement is genuine or merely meant to invite shorts.
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Written By: Cointelegraph
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
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