1 Understanding the Dividend Trap: An In-Depth Analysis Technical Dividend Trap Score in Stock Investment Mohammad Sigit Taruna 1,2* , Sugeng Wahyudi 1 & Muhammad Milzam 2 1 Universitas Diponegoro, Semarang 2 Universitas Pekalongan, Pekalongan *e-mail: msigittaruna_feb@unikal.ac.id msigittaruna@gmail.com Abstract This study investigates the concept of the Dividend Trap, a situation where investors are lured by high dividend yields only to suffer losses due to subsequent stock price declines. This research introduce the Dividend Trap Score, a practical tool for identifying potential dividend traps in stocks, and apply this tool to companies listed in the IDX High Dividend 20. Our findings reveal key indicators that can signal a potential dividend trap, offering valuable insights for both investors and traders. The study concludes with recommendations on how to mitigate the risks associated with dividend traps. Keywords: Dividend Trap; Dividend Policy; Dividend Yield; Dividend Payout Ratio; Stock Price; IDX High Dividend 20 1. Introduction The dividend-based investment strategy, or dividend investing, has become a popular approach among investors, especially those seeking stable and sustainable income Dividend investing is a strategy where investors buy shares of companies that distribute a portion of their profits to shareholders in the form of dividends These companies are often well-established entities with a track record of stable performance and consistent earnings Therefore, stocks with high dividend yields are often considered a safe choice, especially amidst market uncertainty or global economic fluctuations (Jiang, 2022; Schultz, 2023) The main reason behind the popularity of dividend investing is the stability offered by dividends themselves Consistent dividends are seen as an indicator that a company has strong fundamentals and is capable of generating positive cash flow consistently. Furthermore, for investors seeking passive income, dividends are a reliable source of earnings without having to sell their owned shares in addition to stability, stocks with high dividends are often seen as a hedge against inflation in the long term, dividends can grow alongside company profits, allowing investors to maintain their purchasing power.