Bear Trap
Trading jargon is rich with metaphors of war and death. The hunting theme fits well with all of the macho language used by even the mildest-mannered analysts.
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Trading jargon is rich with metaphors of war and death. |
A bear trap is essentially a false breakout from a chart pattern (see Figure 1). The market breaks a support level but is not supported by other technical conditions, such as volume or price momentum. Perhaps the supporting pattern border was not clear. Maybe the market simply drifted through the support without a significant vertical price move.
Figure 1. Australian/U.S. dollar
Remember, the term “breakout” suggests ...
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