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Uptrend vs downtrend

An uptrend is a pattern of higher highs and higher lows in a price. A downtrend is a pattern of lower highs and lower lows. If the highs and lows stay roughly level and overlap, the market is sideways. You can only tell direction from the sequence of steps, never from one number.

Uptrend and Downtrend side by side

 UptrendDowntrend
HighsEach new high is above the one beforeEach new high is below the one before
LowsEach new low is above the one beforeEach new low is below the one before
Pattern nameHigher highs and higher lowsLower highs and lower lows
PullbacksShort falls inside a rising trendShort rises inside a falling trend
A single price tells youAlmost nothing; the price may just be pausingAlmost nothing; the price may just be bouncing
A forecast?No; it describes what has already happenedNo; it describes what has already happened

Highs and lows

Every price line is a series of turns: a high, where it stops rising and turns down, and a low, where it stops falling and turns up. This sequence of highs and lows is called market structure. It tells you what a price has actually been doing, based only on steps that have already happened.

Comparing the steps

Compare each new high with the one before, and each new low with the one before. If both step upward, it is an uptrend. If both step downward, it is a downtrend. If they stay level and overlap, with no clear step in either direction, it is a sideways market. A sideways reading is not a failure: it is an honest reading.

The label does not update itself

A stock can keep the name uptrend for weeks after it has quietly started running low on energy. Only you can check whether the trend still behaves the way it did when you named it, by looking at the size of each rally and how deep each pullback goes.

What it does not do

Naming a trend is not seeing the future. A single price, the number you see when you open an app, tells you almost nothing. Maetis does not give trading advice.

One chart each way (hypothetical numbers)

Uptrend: high one sits at ₹240 and high two at ₹258, clearly above it. Low two at ₹232 sits above low one at ₹220. Both are stepping upward.

Downtrend: high one at ₹258 and high two at ₹240, below it. Low one at ₹232 and low two at ₹220, below it. Both are stepping downward.

Common questions

What is an uptrend?
A pattern of higher highs and higher lows in a price.
What is a downtrend?
A pattern of lower highs and lower lows in a price.
What is a sideways market?
One where the highs and lows stay roughly level and overlap, with no clear step in either direction.
Does an uptrend mean the price will keep rising?
No. It describes what has already happened, and a trend can weaken or end.

Related terms

This page compares ideas and does not recommend either one. Maetis does not give investment, tax or legal advice.