In every market cycle, the same mistake repeats.
Price drops aggressively.
Support reacts.
A strong green candle appears.
Retail traders immediately call it a “bottom.”
But structure tells a different story.
The Psychology Behind the Mistake
After a sharp sell-off, traders become emotionally exhausted.
When price finally bounces, it feels like relief.
Relief is not reversal.
A bounce is simply a reaction — not confirmation of a trend shift.
Markets often produce strong counter-trend moves inside broader bearish structures.
Without structural confirmation, calling a bottom is gambling with better charts.
What Defines a Bearish Structure?
Before labeling any move a reversal, ask:
Are we still printing lower highs?
Is price still below key moving averages (like MA20 on daily)?
Has the previous lower high been broken?
Is volume supporting expansion — or fading?
If lower highs remain intact, the broader structure is still bearish.
A bounce inside a downtrend is still part of the downtrend.
What a Real Reversal Looks Like
A genuine trend shift leaves evidence.
You typically see:
• A break above the previous lower high
• A strong daily close reclaiming key averages
• Expansion volume confirming strength
• Market structure shifting from lower highs to higher highs
Reversals are built on structure, not hope.
Professionals wait for confirmation.
Amateurs anticipate it.
Why Patience Is a Competitive Advantage
Markets reward discipline, not excitement.
Most traders lose because they:
Chase green candles
Ignore invalidation levels
Trade emotion instead of structure
Patience keeps capital alive.
And capital preservation is survival.
Final Thought
Not every bounce is a bottom.
Trade reaction.
Wait for confirmation.
Protect capital first.
Discipline > Prediction.
— TRADX Education
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