3Bullish Trap Chart Patterns Every Forex Trader Needs To Know

What Is A Bull Trap In Trading?

Definition
By definition, a bull trap is when price is temporarily spiked past a resistance level in the
pretense as if the price was going to head up but then it loses its upward momentum and very
soon, starts falling back down.
So all those bullish traders who bought the breakout of the resistance level are now trapped
when price starts falling back down and hitting their stop losses.

What Causes A Bull Trap In Trading?

Bull traps are engineered by professional traders (big money traders) that need liquidity for
their trades.
BullTrapTechnicalAnalysis

A bull trap chart is a bearish signal that forms in an uptrend.

The most common place for bull trap to happen is in a major resistance level/zone. Which means if you see it happening, you should
look to sell.
So what happens is that price is in an uptrend and price hits the resistance level and breaks it and continue to move up.
Breakout traders jump in with their buy orders and price shoots up and they are happy, life is good they think.
But their joy is only short lived.
A few candlesticks later, that upward breakout loses its momentum and then price starts to fall…and it falls a long way.
Those bulls (buyers) who bought are now feeling the pain as their stop loss are getting hit or about to get hit.

Definition of a Bull Trap Candlestick

So what is a bull trap candlestick?
-It is the first candlestick that breaks the resistance level and closes significantly above it
-it can also be the first candlestick that breaks the resistance level and goes up then then eventually heads down and closes below the
resistance level
BULLISH TRAP PATTERN 1
A Bull Trap Candlestick Breaks and Closes above a Resistance
Level but the Next 1st or 2nd Candlesticks after That Are Bearish

The char below shows an example of this situation.

 You can see an obvious resistance level.

 A bull trap candlestick breaks the resistance level and closes

above it.

 However, the 2nd candlestick after the breakout is bearish. As

a matter of fact, it is an inside bar and combining it with the
previous candlestick before it, it forms a bearish harami pattern
(A bearish signal)

 Also note that the next (2nd) candlestick is also bearish,

almost a shooting star or bearish pin bar

Type of candlestick.

Next thing you know, price drops….it was a bull trap.

BULLISH TRAP PATTERN 2
A Bull Trap Candlestick Breaks The Resistance Level and Goes Up
But Eventually Closes Below The Resistance Level Forming A Bearish
Candlestick.

This is when the bull trap candlestick shoots up and then heads
back down and forms a bearish candlestick or it can be a bullish
candlestick with a “bearish momentum.”

It is a one pattern candlestick. You are only looking for one

candlestick that does this.

This chart below shows you are very good example:

 Price breaks through the resistance level as if a real upward

breakout causing buyers to jump in.

 Then it changes direction and head down and closes below the
resistance level.

 The fact that it close below the resistance level should be a

warning sign that something is not right and it is most likely a bull
trap.

 The breakout of the low of this bull trap candlestick see price
heading down.

 Bull trap candlesticks to look for in this situation are shooting

stars or pin bar candlesticks.

 Ideally, look for bearish candlesticks in this situation or extremely

bearish looking bullish candlesticks.
BULLISH TRAP PATTERN 3
A Bullish Bull Trap Candlestick Breaks the Resistance Level, Goes Up
But Closes Below The Resistance Level. The Next 1 or 2 Candlesticks
are Bearish

Read the above carefully.

The bull trap candlestick must be bullish…it will be green

candlestick in other words.

The only thing is that it must close below the resistance level.

The fact that it is a bullish candlestick that closes below the

resistance level will cause many bulls (buyers) to think that the
price will continue to go up…

Then here comes the next clue: watch the 1st or 2nd candlestick
after that. If they are bearish candlesticks, then there’s a great
chance that it is a bull trap.
Summary of Bull Trap Chart Patterns
A bull trap chart pattern is a bearish signal when you see one forming.
This may not be the complete bull trap chart patterns guide but at least
now you know what to look for price is heading up to a resistance level.