Is it a Bear trap?

Wednesday, 29th April 2009 15:49 - by Boredmum

I had a terrible time in the markets last year, selling at a loss and holding some even greater paper losses. Since the start of this year, things have slowly been looking up for me. The last couple of weeks have really been picking up momentum to the point that it is actually quite scary. It has made me think “What has changed?” Am I so much better at trading? Have I finally learned from all the early mistakes? Am I finally a clued-up Trader? Is it just an element of luck or have I managed to finally get into a few shares just before the rise? Is it just that the markets have hit bottom? Then I read about a ‘Bear trap’. All you seasoned Traders will know that we are in a Bear market (http://www.investorwords.com/443/bear_market.html). A Bear trap is where the markets that have been trading down suddenly charge ahead, only to fall to much lower lows. It is effectively a false sign that the markets are reversing a downward trend. There are lots of companies at the moment with huge amounts of debt and their share price (sp) is charging forward. Be careful where you invest and look out for that trap for when the sp comes tumbling back down.