Trade Stock Indices

When Does a Stock Downward Trend Start?

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

Example of How to Know When a Trading Down Trend is Starting

When Does a Stock Downwards Trend Start

Follow the trend - it's a key rule for traders. Never fight it when dealing with indices. Prices often keep going one way for a while. This approach gives solid chances to earn from market moves.

Principles of How to Draw Downward Trend-Line

  1. Use candle charts to draw trendlines

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

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