3 Bull Trap Chart Patterns Every Forex Trader Needs To Know

Any chart pattern trader should be familiar with bull trap chart patterns as they are quite common in markets such as Forex, Futures, and the Stock market.

Another term for a bull trap is an “upthrust” and that term was coined by Richard Wyckoff.  This is a chart pattern that I use quite regularly along with its cousin the bear trap when looking for trapped traders and to profit from their actions.

When we are in a bull market, you want to be on alert for this chart pattern at major resistance levels.  I like to see a rush of momentum into the highs to have a higher probability of seeing a bull trap pattern take place.

Let’s me show you what to look for and the 3 bull trap chart patterns to look for.

Bull Trap Technical Analysis

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.

It does not have to be an all time high and we are looking for a bull trap in a bullish market, not a bear market.

If the setup fits your criteria, you’d be looking to sell which would be a counter trend position during a bull market.

It is possible that you will catch a turn in trend but you should look at that as a gift.

What happens during a bull trap:

  • Price is in an uptrend and hits the resistance level, breaks it and continue to move up.
  • Breakout traders jump in with their buy orders and price shoots up
  • Traders will sell limit short are triggered in but price continues to move up and hits their stops
  • Once the liquidity dries up at these levels, price falls back inside the resistance zone
  • Traders get positioned short, the breakout traders jump in to make back their loss, short rejoin after getting stopped out
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You can see where the term “trapped traders” comes from:

  1. Short traders get taken out and are trapped out of the market
  2. Longs are in the market and price pulls back against them trapping them and hoping for a bounce
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