What's an Example of a Forex Down Trend? - Identifying Down Trends in Forex

A downwards trend in forex is the tendency of prices to move in a downwards direction for a period of time in a general direction downward.

Down Trends can be analyzed using downwards forex trend lines.

Downward forex trend line analysis helps traders to define the downward direction of the FX trading market. Down trend lines connect a series of price highs forming a sloping trend which represents the general downwards movement of the forex price.

For a downwards sloping line this is known as an down trend - the trend-line drawn is known as an downward trend line.

Downwards Forex Trend Line

A downwards forex trend line is drawn above pattern formed by consecutive lower highs, it must connect at least two highs, with most recent high being lower.

Since price moves downward in a zigzag manner traders normally draw a line which shows the general downwards direction. In forex market technical analysis, this general direction is referred to as the Forex TREND by traders. This down trend line is plotted on a Forex chart showing the resistance levels (bearish forex trend market direction).

What is an Examples of a Forex Down Trend? Identifying Downward Trends in Forex - Forex Down Trend Definition

A forex down trend occurs when the price makes a series of lower highs and lower lows. Each price high is lower than the previous price high - lower high, and each price low is lower than the previous price low - lower low therefore showing bearish forex price movement.

Forex down trend lines gain more validity each time price touches but does not penetrate the trend-line. A down trend remains the general direction until this series of lower price highs and lower price lows is broken - forex trend-line break reversal signal.