What is a bear trap in trading and how to avoid it?

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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