A false breakout that lures traders in, then reverses against them. Also called: trap. Finviro's term: “Bull Trap / Bear Trap”.
What this trap is
A price trap (Bull Trap / Bear Trap) is a break that tempts, then betrays. A breakout above resistance pulls in buyers, then drops back under it quickly (a bull trap). Or a break of support lures sellers, then flips back above it (a bear trap). The trapped traders fuel the reverse move: their forced exits push it along.
Why they keep happening
Because everyone sees the well-known levels: above them sit resting buy orders and sellers’ stops. A short breakout sweeps them all, then reverses. Some are deliberate hunts by large liquidity that needs buyers to sell into. Others are honest failures of a breakout with no fuel.
Signs of a false break
Weak volume, which does not fit a real break. No flow confirmation (a rally on pure premium selling). Price unable to stay beyond the level into the close. Thin breadth, which says the army did not follow the flag. The close behind the level is the referee, not the poke of the moment.
Hypothetical example
A stock breaks a two-month resistance at $150 at midday on ordinary volume and weak flow, then closes at $147. The breakout buyers are stuck above, and tomorrow their exit pressure is the fuel for the next drop. Waiting for the close would have made the difference.
Common mistake
Chasing a break the moment it happens, with no confirmation: half the discipline in this game is waiting for a confirming close or a retest that holds. You miss a few beginnings and avoid many traps.
How to avoid them, not how to predict them
Three conditions for a breakout: high relative volume, a close outside the range rather than a brief poke, and follow-through in the next session. Waiting for all three means missing part of the move and avoiding most traps. Over a large sample, that trade pays.
Where to see it on the platform
The Gamma dashboard shows whether positioning behind the level supports the break, the flow page shows whether real money came with it, and the fake-breakout filter in the trading tools spots the pattern automatically.
The scanner shows relative volume alongside the breakout, so you can tell a backed move from an empty one.
