Price declines do not necessarily indicate a reversal. True trend changes come with clear structural signals.

This chart is a classic example:

On the left side, there is an upward trend; although the price experiences multiple declines along the way, they are merely pullbacks and do not disrupt the overall ascending rhythm. The right side, however, shows a true trend reversal, with a complete change in direction and the price continuing to decline.

How to differentiate between a pullback and a reversal?

The key lies in the following three structural judgments:

1. Does it break the trend rhythm?

A pullback may decline but still maintains "higher highs and higher lows," indicating that the trend continues. Only when "lower highs and lower lows" appear does it signal the beginning of a trend reversal.

2. Does it break key structures?

Pullbacks typically do not break previous lows or significant support. In contrast, a reversal is accompanied by the loss of key levels, indicating a complete structural breakdown.

3. Is there a trendline inflection point?

During a pullback phase, the trendline support remains valid;

During a reversal, the trendline is clearly broken, and the price action is rearranged. Price declines do not necessarily indicate a reversal. True trend changes come with clear structural signals.