What's an Explanation of a Down Trend? Identifying Down Trends in Gold Trading

A downwards trend in gold trading 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 trendlines.

Downward trendline analysis helps traders to define the downward direction of the price. Down trend-lines connect a series of price highs forming a sloping trend which represents the general downwards movement of the price.

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

Downward Trend-Line

A downwards trend-line is drawn above setup formed by consecutive lower highs, it must connect at least 2 highs, with most recent high being lower.

Since price moves downwards in a zigzag manner traders usually draw a line which highlights the general downwards direction. In market analysis, this general direction is known as the Gold TREND by traders. This down trend-line is drawn on a chart showing the resistance zones (bearish trend direction).

What is an Explanation of a Down Trend? Identifying Down Trends in Gold Trading

What's an Explanation of a Down Trend? Identifying Downward Trends in Gold Trading

A down trend occurs when the price makes series of lower highs & lower lows. Each gold price high is lower and lesser than prior price high - lower high: LH, & each xauusd gold price low is lower than prior price low - lower low: LL therefore displaying bearish xauusd gold price movement.

Gold Trading down trend-lines gain more validity every time price tests/touches but does not penetrate the trend line. A down trend remains the general direction til this series of lower price highs & lower price lows is broken - trend-line break reversal setup.

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What's an Explanation of a Down Trend? Identifying Down Trends in Gold Trading

Downward Trend-Line