Downtrend
A price sequence in which each significant high is below the previous high and each significant low is below the previous low.
How it is identified
Test: current swing high < previous swing high, and current swing low < previous swing low
Unit
qualitative
In depth
A downtrend is the mirror of an uptrend and is broken when a swing high is exceeded rather than when price merely rises for a few sessions. The asymmetry worth knowing is behavioural: falls tend to be faster and more volatile than rises, so the same percentage move takes fewer sessions and produces wider ranges. Attempting to buy into a downtrend on the argument that the price is low is the mechanism behind most value traps, since the trend is a description of price and the trap is a fact about the business. Identifying a downtrend says nothing about where it ends, and this entry offers no such view.
Worked example
Highs of ₹534, ₹512 and ₹496 with lows of ₹483, ₹461 and ₹440 satisfy the definition. A close above ₹496 would break the sequence of lower highs; a close at ₹470 would not.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Downtrend” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.