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Learn to understand Downtrend and use it to take short position

downtrend_trend_tutorials

Downtrend also known as falling trend. A downtrend is a series of lower highs and lower lows. A downtrend line is a descending line and can be drawn by connecting two or more high points having lower highs. Down trend line acts as a resistance as long as the price remains below the trend line.

Each high in a downtrend signals a probable selling point. More points in the trendline indicates more validity and strength of the trend.

Volume like other technical indicators plays a vital role in affirming the trend. In a downtrend the volume decreases as the trendlines continues downside. An increase in volume activity signals that the bears are losing is over bulls. One may also pay attention to other technical indicators like MACD, Relative Strength Indicator (RSI), etc., for confirmation and strength of the trend.

Now we have understood what Downtrend is. Now its time to look into other trends pattern and how they are interpreted in real time. Please follow these links to find about trends. We have explained them in details and provided you with ample real life examples of them.

Example of Downtrend Chart Pattern Formed By Reliance Industries Ltd.

Downtrend_Patterns_trend_Reliance

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Related Tutorial On Technical Analysis

Trends BasicsUptrend BasicsSideways BasicsTrend Strength By ADX
Tool to Find TrendTrend Trading StrategiesCommon Mistakes in Trend 

Trends Stock Screener of Indian Stocks can be found at

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Total Comments 1

User Comments
Posted by Trendy
Posted on: 01-Feb-2014
First Place it was a wrong buy since this stock was facing a strong resistance ard/near 305.Anyways If you have it already then you can arbitrage it. This stock is having a good support at 255 and at 247 looking at the other TA buy here.
 Trendy


(All analysis is based on End of Trade day's Value. Expected time of update is between 5 to 5.30 PM exchange time Zone)

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