A natural correction or the beginning of a decline?!
How can you distinguish between them?
A natural correction occurs when the market takes a breath after a strong rise. Here are the most important signs: The decline ranges from 5% to 20% (depending on the time frame). The price remains above important support levels or a clear uptrend. Trading volume decreases with the decline, meaning there is no aggressive selling (very important). There is a clear rebound from strong demand areas or important Fibonacci levels (such as 0.618). The beginning of a real decline is clear from several signals we need to pay attention to: A break of strong support levels or major trends. A significant increase in selling volume. The price fails to recover support areas that have turned into resistance. The emergence of negative news. Always monitor the market structure. If you are in an uptrend and the last bottom is broken, you must be careful, because the market may have changed direction!
