Trade Stock Indices

When Does a Stock Downward Trend Start?

Course Tutorial: Steps to Identify a Beginning Downward Trend with Examples

When Does a Stock Downwards Trend Start

The trend is your friend. Is a popular phrase among traders because you never should go against the trend when trading indices. This is most reliable technique to trade because once prices begin to move in one specific direction they can move in that direction for quite some time - therefore using this market trend method presents an opportunity to make profits from the Trading market.

Principles of How to Draw Downwards Trendlines

1. Use candlestick charts to draw trend lines

2. The levels used to draw the trendline - down-ward trend line are along the highs of the price bars in a bearish market. A down-ward bearish trend is defined by lower highs & lower lows.
3. The points used to draw the trendlines are extremes points - the high trading price. These extreme price levels are crucial because a price close beyond these extreme tells traders the down trend of the instrument might be changing. This is an exit trading signal.
4. The more times a down-wards trendline is hit but not broken, the more powerful its downward trend signal.