Downtrend

Downtrend
Describes the price movement of a financial asset when the overall direction is downward. A formal downtrend occurs when each successive peak and trough is lower than the ones found earlier in the trend.

Downtrend


Notice how each successive peak and trough is lower than the previous one. For example, the low at Point 3 is lower than the low at Point 1. The downtrend will be deemed broken once the price closes above the high at Point 4.

Downtrend is the opposite of uptrend

Many traders seek to avoid downtrends because they can drastically affect the value of any investment. A downtrend can last for minutes, days, weeks, months or even years so identifying a downtrend early is very important. Once a downtrend has been established (series of lower peaks) a trader should be very cautious about entering into any new long positions.


Investment dictionary. . 2012.

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Look at other dictionaries:

  • downtrend — index decline, decrease Burton s Legal Thesaurus. William C. Burton. 2006 …   Law dictionary

  • downtrend — [doun′trend΄] n. a downward trend, esp. a financial one …   English World dictionary

  • downtrend — A channel of downward price movement. The CENTER ONLINE Futures Glossary A price trend characterized by a series of lower highs and lower lows. Chicago Mercantile Exchange Glossary * * *    Generally used to describe a falling trend in prices.… …   Financial and business terms

  • downtrend — /ˈdaʊntrɛnd/ (say downtrend) noun 1. a downward trend: a downtrend in interest rates; *We emphasised that the emerging downtrend in newspaper advertising may well have been largely due to the migration of advertising to the Internet –aap news,… …  

  • downtrend — /down trend /, n. a downward or decreasing tendency, movement, or shift: a downtrend in gasoline consumption; a downtrend in stock prices. [1925 30; DOWN1 + TREND] * * * …   Universalium

  • downtrend — [[t]da͟ʊntrend[/t]] N SING A downtrend is a general downward movement in something such as a company s profits or the economy. The increase slowed to 0.4 percent, possibly indicating the start of a downtrend. Ant: uptrend …   English dictionary

  • downtrend — UK [ˈdaʊnˌtrend] / US noun [countable] Word forms downtrend : singular downtrend plural downtrends business a general reduction in the level or amount of something, especially economic activity …   English dictionary

  • downtrend — noun Any gradual movement towards a lower state or value. The stock market took a long time to recover from the downtrend …   Wiktionary

  • downtrend — ˈ ̷ ̷ˌ ̷ ̷ noun : a tendency downward especially in economic matters a persistent downtrend in sales …   Useful english dictionary

  • downtrend — noun Date: 1926 downturn …   New Collegiate Dictionary

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