📉 Downtrend Identification CheatsheetWhat Is a Downtrend? A downtrend is a gradual reduction in the price or value of a stock or commodity, or the activity of a financial market. A downtrend can be contrasted with an uptrend. Downtrends are characterized by lower peaks and troughs and mimic changes in the perception of investors. A downtrend is fueled by a change in the supply of stocks investors want to sell compared with the demand for the stock by investors who want to buy. Downtrends are responses to changes that surround the security, whether macroeconomic or those associated with a company's business activity.
🔹Understanding and Identifying Downtrends
As much as it is important to look out for uptrends when trading, it is equally important to understand and identify downtrends. A trader may potentially save money if they decide to sell off a declining stock. If many traders decide to sell a stock at the same time, it will result in a sharp decline in the stock price. The stock market is sentiment-driven, and fear of a further decline may result in even further selloffs of a stock. Some traders that frequently day trade may decide to implement stop-loss orders to protect themselves against a downtrend. A stop-loss order placed with a broker helps a trader sell once the price of the security reaches a certain price. Downtrends can vary from a gradual continuation to a sharp decline. A sharp decline may occur as a result of news-related topics, such as a poor quarterly earnings report or loss of a lawsuit. A downtrend can be identified and understood through various forms of technical analysis. One simple area of technical analysis is the use of trendlines. Trendlines connect a series of high or low points. The reversal of a declining trendline signals an uptrend. Another simple area of technical analysis is the moving average technical indicator. The moving average takes the mean of prices over a period in the past. If the price of a stock tends to stay below the moving average, it signals that the price is on a downtrend.
🔹Trading on a Downtrend
Many traders look to profit from sell offs of a stock. While many traders will sell, taking the view that a price will decrease further in the future, some traders take the opposite view of hoping for a price increase. Downtrends may also lead to attractive valuation and present new opportunities for traders to purchase shares of stock.
In another sense, downtrends allow traders to make money by short-selling stocks. In order to short a stock, a trader borrows shares and immediately sells them, in hopes that the price will fall. If the price of the stock goes down, then the individual will repurchase the shares back at the lower price and return the borrowed shares. The difference between the old price and the new price is the profit that a short-selling trader holds.
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Downtrend
Is BTC still heading to the baseline support?I still think BTC is heading to the baseline support around 12k, I am talking about further down from here below capitulation, moving further into desperation territory, followed by a long consolidation period.
Why? because the downtrend haven't changed yet, together with equities cryptos are in a bear trend IMO.
Bearish points: The 50ma has just crossed above the 200ma, RSI also showing contraction in overbought territory.
The speed of the downfall has changed, but not the direction IMO.
Watch out.
US30 Price Action and Weekly Market Structure - Short ObservedObserving US30 on the weekly chart we can see the bigger picture. In the chart we can see that price has been in an overall downtrend since leaving the top level marked. Price is currently indecisive at our most recent lower low/supply zone. Although we have been bouncing around going in no particular direction, we still see signs of rejection to the upside.
Considering we are in an overall downtrend, currently rejecting to break the previous lower low, several major bearish rejections, a few pinbars, I will be holding a short position to the next major level.
✅GOLD KEY LEVELS📊
✅GOLD is trading in a
Downtrend so I think it will
Go down further and retest
The support level 1
After that we will see
The price either go down
Towards the support level 2&3
Or we will see a change in the
Direction and the resistance 1&2
Will take the hit again
ANALYSIS📊
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XAUUSD 172X POSSIBLE IN THE NEXT COUPLE OF DAYSDear Traders,
From technical perspective on this pair, I see the possibly of gold testing the 178x zone soon and 172x in the next few days if nothing fundamental changes.
I have been on the sell sin 1921 and we may likely see the retest of 1680 which happens to be the breakout point for Gold since October 2022.
NZD-USD Bearish Breakout! Sell!
Hello,Traders!
NZD-USD is trading in a local
Downtrend and the pair
Broke the rising support
Made a pullback and retest
And is going down again
So I am bearish biased
And I think that we will
See a further move down
Sell!
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EUR-USD Swing Analysis! Sell!
Hello,Traders!
EUR-USD is trading in a
Downtrend and is now
Stuck in a range between
The horizontal support
And resistance so we need
To wait for the breakout
And then follow it's
Direction which I think
Will be down hence a short!
Sell!
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downward trend is more likelySports movement is very fast
In the upward movement, we see many shadows that indicate the weakness of buyers
It seems that the downward trend is more likely
⚠️ This Analysis will be updated ...
👤 Banipal : @hosseinbakrani
📅 02.13.2023
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