Who it's for — Anyone who bought because "it had fallen so much" and watched it fall further. The trend shows which side dominates right now: buyers or sellers.
A trend is the prevailing direction of an asset's price over a defined period and timeframe. Price does not move in a straight line: it advances in impulses and corrections; the trend describes the structure of those highs and lows over time.
In simple terms — Even in a rising market there are down days. The trend is the direction of the road, not the last candle. Trading with the trend means working with the dominant force of the moment.
Uptrend (bullish trend)
In simple terms — Buyers pay higher prices at each pullback low: every step back stays above the previous low.
An uptrend is confirmed by Higher Highs (HH) and Higher Lows (HL). Each correction ends above the prior low — demand returns before structure breaks.
| Element | Rule |
|---|---|
| Highs | Each peak exceeds the previous peak |
| Lows | Each pullback low stays above the previous low |
| Operational read | Long setups have favourable context; counter-trend shorts need tighter risk |
Downtrend (bearish trend)
In simple terms — Sellers accept lower prices at each bounce: every rally fails below the previous high.
A downtrend shows Lower Highs (LH) and Lower Lows (LL). Rallies are sold at levels below the prior high.
| Element | Rule |
|---|---|
| Highs | Each bounce stays below the previous high |
| Lows | Each new low breaks below the previous low |
| Operational read | Short setups have favourable context; "buying the dip" is high risk |
Break of Structure
Trend structure fails when the HH/HL or LH/LL sequence breaks.
In an uptrend, a Lower Low signals buyers did not defend the last correction low — possible Market Structure Shift and reversal or range.
In a downtrend, a Higher High may signal a change of control.
Common mistake — Bottom-fishing in a structured downtrend: every bounce looks like "the opportunity", but structure stays bearish until a confirmed HH appears.
Summary
- Uptrend: HH + HL — favour long setups or wait for pullbacks.
- Downtrend: LH + LL — favour short setups or stay flat.
- Range: no clear sequence — see Range.
Bronze path — Module: How price moves. Next: Range. Index: Bronze path.