// HOW-TO GUIDE
8 min READ
How to Identify a Market Trend (Uptrend vs Downtrend)
Identifying the trend is the most basic yet most important skill in trading. If you are on the wrong side of the trend, the best entry in the world won't save you.
01
Observe Market Structure
An uptrend is defined by Higher Highs and Higher Lows. A downtrend is defined by Lower Highs and Lower Lows.
02
Use a Filter (200 SMA)
If the price is above the 200-day Simple Moving Average, the long-term trend is bullish. If below, it is bearish.
03
Check Multiple Timeframes
A trend on the 15-minute chart might be a small correction on the Daily chart. Always align with the higher timeframe.
Common Mistakes to Avoid
- /Trying to pick tops and bottoms
- /Ignoring the higher-timeframe trend
The Drawdown Way
Our Trend Dashboard gives you a bird's-eye view of all market directions.
Questions & Answers.
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