The price has two relative lows in the earlier phase. When the price drops again to the previous low (marked by the circle), if the price is supported by the previous low and does not fall further, we can use this previous low as a support level to enter a long position. When the price reaches the previous low and is supported, a reversal candlestick pattern, the hammer, appears at the bottom, which increases the chances of a successful entry.
The difference between a long position and a short position is that for long positions, it is best to have volume support, which increases the likelihood of price rising. This is also one of the reasons why most traders prefer short positions, because sometimes short positions can work even without volume support.