Downtrend Market, Learn Market Structure The Series.
In the previous series, we talked about the topic of uptrend, which is one of the important parts of the market structure. This time we're going to review downtrend markets and market structures.
Basically, the market forms only two trends, an uptrend and a downtrend.
Both of these trends can be greatly utilized to secure profit opportunities, especially in the derivatives market.
A downtrend market is a price phase in which there is a decline in demand because there is too much supply.
In derivative markets, downtrend market structures can be used as well as short positions.
The way to identify downtrends is obviously easy.
The condition to be met if the market is in a downtrend is the existence of two valid swing lows.
As you can see in the picture above, there are already three even valid lows in the market structure. So we can easily conclude that the trend is down.
Once we've identified two valid lows in the market structure, we're just looking for supply areas to look for short market opportunities.
In a downtrend, there must be an invalid trend, and it keeps us down.
By identifying them, it is very easy for us to see invalid downtrend structures.
In the picture above, we can see two valid lows. But dear, the market is going up, and it's a stoploss on the short market position.
Then, is the condition invalid?
Of course, this is because there's demand in the second valid low area, and the price reacts, continuing to rise.
Because in addition to knowing the valid low, we also have to look at the previous price to see if there is a strong demand that is indicative of a continued upward trend or not.
Well, by knowing the previous market conditions at the time of identifying invalid downtrend structures, we can minimize losses on the derivative market.
By understanding the downtrend structure of the market, it can make us selfish not to rush to buy crypto assets or other assets on the spot market..
However, the downtrend structure becomes an opportunity on the derivative market that can be exploited for short-term trading.
Keep training to identify falling market trends so you become skilled at looking at market structures.
This is a session to learn the market structure of the series.
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This is a nice post on downtrend of the stock market, however, have you tried uploading your images in landscape format
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Thanks for the support.
but I have problems when using landscape images. because I wrote this post using a smartphone.
will worry about the quality of the image; it looks very small, and it will make it difficult for the reader to understand it.
Maybe I'll use my friend's PC at the time of writing next. 😅