Take the Stairs Up, Take the Elevator Down: the dominant trend explained
Traders betting on bounces inside a falling market are taking on far more risk than they realize, which is bad news for anyone buying dips on short time frames.
- The bigger trend usually wins, so a market in a downtrend is expected to keep heading lower.
- Buying an upside move on an hourly chart during that downtrend means fighting the trend.
- Rallies against the trend can collapse without warning, wiping out the gain in minutes.
- Prices tend to grind higher slowly and fall fast, so downside moves hurt more than upside moves help.
Outlook: Until the bigger trend turns, quick bounces are likely to keep failing and sellers stay in control.