How do I differentiate between price correction and trend reversal?
✨Depth of movement:
✅Correction: Usually a decline of 10-30% within the trend.
✅Reversal: A deeper decline that breaks key support/resistance levels.
✨Volume analysis:
✅Correction: Decreased trading volume, indicating weak selling pressure.
✅Reversal: Increased trading volume confirms a shift in market sentiment.
✨Key levels:
✅Correction: Price remains above the main support level in an uptrend or below the resistance level in a downtrend.
✅Reversal: Break of key levels, indicating a potential shift in trend.
✨Market sentiment:
✅Correction: Investors see it as a buying opportunity.
✅Reversal: Dominance of fear or greed, leading to continued price movement in the opposite direction.
👋👋Always use multiple confirmations before making a decision, as false signals can occur! 👋👋
