Treading the field of cryptocurrency is similar to other capital markets like forex and stocks \u2014 they are full of traps. The emotional, unknowledgeable, and unsuspecting trader can easily fall prey to any of the most common traps there are \u2014 bull traps and bear traps.Bear TrapsA bear trap occurs when a technical pattern in the crypto charts falsely reverses the signal of an uptrend. The rapid price decline is a trap to lure investors into taking short positions in anticipation of price movements after a key support has been broken. The expected price usually does not happen. After the trap, the price goes back to the uptrend leaving the bear traders at the losing end of a bad trade.When A Bear Trap Goes to WorkA bear trap can entice a market player to anticipate a decline in value of an asset, which then executes a short position on the said financial instrument. But when the value remains flat, the player is in for a loss. While a bull trader sells a declining value for gains, a bear investor positions a short on the value and buys it back after the value drops to an ideal price level. When the expected downward trend does not happen or shoots back up after a short time, a bear trap has occurred.Market players, in general, read technical patterns in analyzing market trends and evaluating investment strategies. Their analytical tools to map out bear traps include Fibonacci retracements, relative strength oscillators, and volume indicators. These are valuable instruments in aiding traders to understand or predict price trends in their legitimacy and sustainability.Short SellingBear traders and investors speculate that the price of an asset or security is on the verge of declining. They believe that the direction of the market overall is on the downtrend.\u2026<\/p>","protected":false},"excerpt":{"rendered":"
Treading the field of cryptocurrency is similar to other capital markets like forex and stocks \u2014 they are full of traps. The emotional, unknowledgeable, and unsuspecting [\u2026]<\/span><\/p>","protected":false},"author":0,"featured_media":2441,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[35],"tags":[],"_links":{"self":[{"href":"https:\/\/afluxcoin.com\/es\/wp-json\/wp\/v2\/posts\/2440"}],"collection":[{"href":"https:\/\/afluxcoin.com\/es\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/afluxcoin.com\/es\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/afluxcoin.com\/es\/wp-json\/wp\/v2\/comments?post=2440"}],"version-history":[{"count":0,"href":"https:\/\/afluxcoin.com\/es\/wp-json\/wp\/v2\/posts\/2440\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/afluxcoin.com\/es\/wp-json\/wp\/v2\/media\/2441"}],"wp:attachment":[{"href":"https:\/\/afluxcoin.com\/es\/wp-json\/wp\/v2\/media?parent=2440"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/afluxcoin.com\/es\/wp-json\/wp\/v2\/categories?post=2440"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/afluxcoin.com\/es\/wp-json\/wp\/v2\/tags?post=2440"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}