A downtrend is a market falling steadily over time, forming lower highs and lower lows. Traders often look to sell, or short, into a downtrend rather than fight it, waiting for pullbacks to enter. The downtrend holds until price structure breaks upward.
Forex Term
Downtrend
A market moving broadly downward with lower highs and lower lows.
Example
A pair sliding from 1.1200 to 1.1000 with each bounce peaking lower is in a downtrend.
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Forex and CFD trading involves significant risk of loss and is not suitable for all investors. Leverage can work against you. This content is educational and not financial advice — always do your own research.