A bear trap in trading is like a trick in the market that makes you think prices are going to keep falling, but then they suddenly shoot back up, leaving you stuck in a bad position.

Imagine you’re watching a stock, and it starts to drop. You think, "This is going to fall even more, so I should sell now or maybe even bet on it going down." Many other traders think the same, so they start selling too. But then, out of nowhere, the stock reverses direction and starts climbing back up quickly. If you had sold, you’re now stuck out of the market or, worse, if you had bet on the price going down, you're losing money fast as the price rises.

Example:

Let's say you’re following a company’s stock that’s currently at $100 per share. The stock starts dropping to $90, $85, and you think, "Wow, this is going to keep falling. I should sell or short it (bet against it)." So, you and others sell at $85, thinking you’re making a smart move. But suddenly, the stock shoots back up to $100 or even higher. Now, if you sold, you’ve missed the chance to profit from the rise. If you shorted the stock, you’re losing money as the price climbs.

This quick reversal in price, where it looked like it was going to keep falling but didn’t, is what we call a "bear trap." The “trap” part comes from the fact that it tricks you into making the wrong move, and it’s often set by big traders who know how to influence the market.

To avoid bear traps, it’s important to stay cautious and not rush into decisions based just on short-term moves. Always look at the bigger picture of the market.