📉 How to Identify a Downtrend in the Market
Spotting a downtrend early helps you avoid bad buys and catch profitable short trades. Here’s what to look for:
🔻 1. Lower Highs & Lower Lows
Each new high is lower than the previous
Each new low is lower too
Classic sign of bearish momentum
📉 2. Price Below Key Moving Averages
Price stays under the 50 EMA or 200 EMA
Acts as dynamic resistance
📊 3. Bearish Candlestick Patterns
Engulfing, Evening Star, or Shooting Star
Shows strong seller control
📉 4. Break of Market Structure
Support levels get broken
No higher highs forming
📉 5. Volume Confirmation
Volume increases on down moves
Decreases on pullbacks or up moves
🔍 Tip: Use multiple confirmations not just one to avoid fake signals