[Stocks, FX, Cryptocurrencies] Difference between fake downtrend and downtrend


As of March 2022, the Japanese yen market has continued to crash. Japanese yen continues to sell in almost all currency pairs, making it a very fierce surge. I think there are many people who are aiming to change the downtrend from this uptrend at a market price that is likely to rise by nearly 10 yen. However, it takes a lot of courage to aim for a contrarian downtrend in this surge market. If it comes off, it will be a big loss and it is certain that you will lose a lot. Therefore, this time, I am writing an article about the characteristics of price movements when changing from an uptrend to a downtrend.


Selling price movement habit

Unlike buying, selling has a habit of price movements. It is a big feature that a big drop comes when a shift from a big uptrend to a downtrend occurs. This is easy to spot even for beginners, and it is easy to identify. Large price movements occur in a matter of hours, making it easy to distinguish visually.

In the case of fake lowering

In the case of fake lowering the damage, the hidden line is very short. The chart below is the 1-hour chart of AUD / JPY in early March 2022. We pay attention to the red hidden lines, but all the hidden lines are short, and even if there are continuous hidden lines, the amount of decline is small. Such a decline will not turn into a downtrend, no matter how many hours it lasts. Since the buying support is strong, the rate of decline is suppressed and the trend cannot be changed.

Even if you look at the above, if it ends with a short decline, the 100% downtrend will not come. It is a temporary drop, and the mainstream is just an uptrend.

Even if one big drop occurs, if it is bought back in a blink of an eye on the next candlestick, it will be a bad deal. It is important that large declines appear in continuous candlesticks.


If you really switch from an uptrend to a downtrend, there will be a series of long hidden lines. The chart below is an hourly chart of AUD / JPY for February 2022. You can see that after several long whiskers, long hidden lines appear in succession. This is the real downtrend. If there really is a downtrend, 100-150 pips can easily drop in a few hours.

Selling features

In the case of selling, a big drop will come at once in a few hours. Unlike buying, selling has a lot of momentum, and big drops occur in a row. Unlike the case of buying, it drops more than 100 pips in just a few hours, so it is easy to distinguish visually, so even beginners can understand it very easily.