Bull Trap

A bull trap is a false technical signal in financial markets where a security's price appears to break out above a key resistance level — suggesting the beginning of a new uptrend — only to quickly reverse and fall below the breakout point, trapping bullish traders who entered long positions on the apparent breakout. Bull traps are particularly dangerous because they occur at technically significant levels and can lead to sharp losses for traders who bought in anticipation of sustained upward momentum. Recognising bull traps — through volume confirmation, momentum divergence, and price action context — is a critical risk management skill for active traders on Ventura Securities operating in Indian equity and derivative markets.