Whipsaw

A rapid price reversal that catches traders on the wrong side, often triggering stop-losses in both directions during choppy, range-bound markets. A whipsaw occurs when a stock breaks above resistance, luring in buyers, then immediately reverses and falls below support, trapping those same buyers and triggering short entries that then also reverse. Whipsaws are most common during low-volume, indecisive trading sessions and are the bane of mechanical breakout strategies.