A downtrend occurs when the price of a financial asset moves lower and lower in price over time.

In a downtrend a price can still occasionally move higher, a downtrend tends to be characterised by low peaks and low troughs over a period of time. Downtrends are important for technical analysts because they generally are representative of something more than just a random losing period; assets in a downtrend tend to move lower and lower until some condition within the market changes.

A downtrend can be directly contrasted with an uptrend.

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