Downward trend? Huh? Upward trend?

First, I would like to apologize.

To catch your eye, I deliberately used a strong title.
If anyone felt uncomfortable, I am sorry.

However, in this article, I intend to deliver what is truly essential.
I would be grateful if you read to the end.

Prices have fallen.
I thought, “the downtrend has begun,” and I sold.

At that moment, it moves in the opposite direction.
After you hit the stop loss, the price rises again.

If you have repeated this many times,
I must tell you something tough.

You judge the trend by the direction of price movement.
Because it is falling, it’s a downtrend. Because it is rising, it’s an uptrend.

That way of judging is incorrect.

■ Check whether this applies to you

□ When prices start to fall, you think it has changed to a downtrend
□ You cannot explain in words the criteria you use to determine that the trend has changed
□ Every time you look, your judgment of whether it is rising or falling changes
□ When you enter thinking “the trend has changed,” the price moves back in the original direction

If two or more apply, what is written in this article is the cause of your losses.

■ Even when it’s falling, the uptrend is not over

In an uptrend, prices do not rise in a straight line.
They go up, then down, then up again.

If you look at this “falling” part,
you might judge that it has changed to a downtrend.

However, that decline could be a pullback in an uptrend.
If it is a pullback, after the decline ends, the rise resumes.

Prices are falling.
That alone does not mean a downtrend.

■ Trends are determined by “highs and lows,” not by the direction

So, how do you determine the trend?

The answer is highs and lows.

In an uptrend,
the highs are new highs, and the lows are raised as well.

Therefore, even if prices fall,
as long as you have not broken the recent low,
you are still in an uptrend.
That decline is just a pullback.

An uptrend is considered over only when the price breaks below that low.

It may be a bit harsh to say, but
judging “it is down because it is falling” is the same as assuming a parked car is in a parking lot because you see it stopped before a red signal.

So, in an actual chart, which high and low should you look at?
Where do you have to break to say the trend has changed?

From here on, I will carefully explain in a video using real charts.

■ Explanation video