Vladimir RibakovOwner, Chief Trader at Home Trader Club (Former Traders Academy Club), Owner, Chief Trader at Home Trader Club (Former Traders Academy Club) · Owner, Chief Trader at Home Trader Club (Former Traders Academy Club)

How To Find And Trade Bearish Trendlines

8 Jul 2024 · 1 min

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1:00

In this instructional video, Vladimir Ribakov explains what a bearish trend line is, how to draw and validate it, and why it matters for traders. He defines a bearish trend line as a series of lower highs and lower lows that appears in a downtrend. While only two points are needed to start a line, at least three lower highs are required to confirm its validity. The line acts as dynamic resistance: price bounces off it and stays below, offering sell opportunities. Ribakov notes that a break of the bearish trend line to the upside signals a potential trend reversal. He demonstrates the concept with two 4‑hour chart examples – EUR/NZD and EUR/CHF – showing the formation of the line, its break, and the subsequent shift to an uptrend.

Chapters

How to find and identify a bearish trend line? Bearish trend line happens in bearish trend, means sequence of lower highs, lower lows. 2 spots are required to start a trend line, but 3 would validate a trend line. So minimum 3 lower highs are required. Bearish trend line also acts as dynamic resistance, meaning every time the prices bounces back and holds below the line, it could provide further sell opportunities. But when a trend line, a bearish trend line, is broken to the upside, this is a technical sign of a potential trend change. Here are a couple examples. Euro New Zealand, 4-hour chart, bearish trend line connecting at least 3 lower highs, breaks above the trend line, holds above that, and changes the trend to the upside. Euro franc, 4-hour chart, 3 lower highs, lower lows to connect the bearish trend line, at some point completes the break above the trend line, holds above that, and the trend changes. All the way to the upside.