Lower Highs and Lower Lows: Downtrend Structure Explained

A downtrend is generally structurally defined by a sequence of lower highs (each subsequent peak in price is lower than the previous peak) and lower lows (each subsequent trough is lower than the previous trough). This is the direct mirror image of the uptrend structure covered in the previous lesson.

As with uptrends, both lower highs and lower lows are generally considered necessary for a structurally confirmed downtrend. A single lower low without a corresponding lower high might simply reflect a temporary dip rather than a sustained structural downtrend.

Each lower high in a downtrend can be viewed through the lens of the support and resistance concepts covered in the previous unit — each lower high represents a point where sellers stepped in before the previous high was reached, potentially forming minor resistance zones along the way down.