Trends/Trend strength and direction

Lower highs and lower lows

A series of swing highs and swing lows that each sit below the one before.

Trend strength and directionBest on 3M, 6M, 1YAlso called downtrend structure

Illustration of the lower highs and lower lows shape. It is a sketch, not real price data.

What it shows

A downtrend in Dow Theory is a sequence of lower highs and lower lows. Each bounce stops below the last bounce's high and each dip goes below the last dip's low.

We find swing points and count the series.

How we find it

The same code that draws it on your chart follows these steps, with the same result every time.

Find swing highs and lows (5 bars each side).
Compare each swing high with the one before.
Compare each swing low with the one before.
Count the consecutive lower highs and lows.

Starting values: Swing 5 bars each side. These are proposed and will be tuned on real price data before launch.

How to read it

Teal dots are swing lows. Red dots are swing highs.
Each is below the previous one.
The steps descend.

Status labels you may see

Label	What it means
Intact	Last two swing highs and lows each lower.
Broken	Last swing high is above the one before.
Unclear	Mixed.

What cancels it

Broken when a swing high is above the previous swing high.

What traders check next

Number of steps.
Size of the bounces.
The most recent high.

Limits

Defined after the fact.
Swing size is a choice.
Says nothing about the future.

Try it in forecastviz

Open any ticker and choose Trend strength and direction → Lower highs and lower lows in the left menu.
Switch between 3M, 6M, 1Y to see how the picture changes.
Compare with Higher highs and higher lows and Downtrend line on the same chart.

Open on a ticker

Questions

What breaks it?

A higher high.

Is it the opposite of the uptrend?

Yes.