I’m going to show you the 3 bear trap chart patterns which I think not many forex traders know.
You see, I have been caught by bear traps many times over the years in forex trading.
As a result of that, I have observed how price reacts when that happens and in this post, I will show you 3 examples of these bear trap charts.
As a matter of fact, this post here is about bear trap technical analysis and from it you will know how to do bear trap trading.
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If you don’t know what a bear trap is, then read this post: what is a bear trap in forex trading?
What Is A Bear Trap Candlestick?
In this post, I will make a lot of mention about the bear trap candlestick. This is the definition of the bear trap candlestick.
A bear trap candlestick is the candlestick that either:
- breaks the support level and closes below it
- or break the support level but that closes above it.
Right after the bear trap candlestick forms, price tends to move up.
Now, lets get started.
Is A Bear Trap Chart Pattern Bullish Or Bearish?
A bear trap chart pattern is a bullish signal.
This signal forms when price hits a support level and pretends to break it only to reverse and head up.
So you should be looking for a bear trap chart pattern when you spot major support levels.
Bear Trap Chart 1: A Bearish Bear Trap Candlestick Breaks And Closes Below A Support Level
But the Next 1 or 2 Candlesticks After the Breakout Are Bullish Reversal Candlesticks or Show Bullish Momentum.
Bear Trap Chart 2: A Bullish Bear Trap Candlestick Breaks The Support Level and Goes Down But Eventually Closes Above The Support Line Forming A Bullish Candlestick.
Here is an example of this situation shown by this bear trap chart shown below:
Bear Trap Chart 3: A Bearish Bear Trap Candlestick Breaks the support level and goes down but closes above the support level. The next 1 or 2 candlesticks are bullish
Here is the example of that situation shown below by this bear trap chart:
These 3 bear traps chart formations provide really good buy signals especially if they form around major support levels.
Next time, when price comes down to a major support level and any of these bear trap chart patterns form, you should be watching the bear trap candlestick as well as what type of candlesticks form after the formation of the bear trap candlesticks.
These will give you the buy signal you need.
You may also be interested to read:
- my free price action trading course
- top 10 reversal candlesticks
- how to trade elliot waves in 6 simple steps
- the ultimate guide to order flow trading
- 7 things you need to know about head and sholders chart pattern
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