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Recognize downtrend

Recognize downtrend

For prices, there are only three trends :

1. Price rise

2. Prices fall

3. Price shock, that is, the price has no obvious upward or downward trend.

In each case, we can buy and sell to obtain profit from the price difference.


price fall

The performance of the price downtrend :
Consists of a continuous declines, each of which continues to cross the previous low point, and the mixed raise in the middle will not break the previous high point. In short, a downtrend is composed of a series of price movements, with decreasing of the point high and low.

It is easy to understand by looking at the price trend chart:

Seeing that the price goes all the way down, it is obvious that we should sell at a high price 「A B C D E 」 and wait for the price to fall 「a b c d e」before buying. The price difference in this is our profit.

In any period of downtrend, connecting two adjacent price lows is called a downtrend line.


Observing the features of the downtrend chart, there are many opportunities to sell :
1. When the price decline below the previous low

2. When the price rebounds to the previous high

When a downtrend occurs, the trend will not change easily, and we can make profits by continuing selling transactions.