#TradingTypes101

Natural Correction or Beginning of a Downtrend?!

How can you distinguish between them?

🟢A natural correction occurs when the market takes a "breath" after a strong rise. Here are the key signs:

The drop is between 5% to 20% (depending on the time frame).

The price remains above important supports or a clear upward trend.

Trading volume decreases with the drop, meaning there is no aggressive selling (very important).

There is a clear bounce from strong demand areas or important Fibonacci levels (like 0.618).

🔴However, the beginning of a real downtrend is clear from several signals we need to pay attention to:

Breaking strong supports or key trends.

A significant increase in selling volume.

The price fails to reclaim support areas that have turned into resistance.

The emergence of negative news.

Always monitor the market structure; if you are in an upward trend and a recent low is broken, you need to be cautious because the market may have changed its direction!