TA Education 2｜How to Spot 2 Common Bearish Patterns?
Hello everyone! Today, we’ll be learning the second lesson of the TA Challenge, focusing on identifying two types of bear market patterns and providing relevant stock examples. You can click here to access yesterday’s lesson: 🎁TA Education｜Understand Market Signals! How to Spot $MSFT & $TSLA's Uptrend? and future lessons will continue to be published on the Tiger Chat account!
Healthy Downtrend
Key Characteristics of a Healthy Downtrend:
Price forms lower lows and lower highs: Each bounce is weaker than the last, confirming sellers are in control.
Volume expands on downswings: Red volume bars increase as selling pressure intensifies.
Volume contracts on relief rallies: Temporary upward moves happen on weak volume, showing buyers lack strength.
Essentially the opposite of a healthy uptrend: Momentum flows downward, supported by stronger selling participation.
Example: $Meta Platforms, Inc.(META)$, August to September 2023 During this period, META exhibited a textbook downtrend. Prices continued to create lower highs and lower lows, while volume consistently surged during sell-offs and faded during small rebounds. This pattern confirmed strong bearish momentum and a sustained seller-driven trend.
False Breakout (Low Volume)
Key Characteristics of a False Breakout:
Price breaks above resistance but volume is weak: The move looks real at first, but lacks the participation needed to sustain it.
Often just “pokes” above the level, then quickly reverses: Price cannot stay above resistance and slips back inside the range.
Signals a lack of conviction: Buyers are not strong enough to support the breakout.
Analogy: Like trying to push open a heavy door, but no one is helping from behind.
For example: $CME Bitcoin - main 2512(BTCmain)$ , March 3–23 During this period, Bitcoin briefly pushed above resistance, but volume stayed weak. The breakout failed to gain traction, and the price quickly fell back below the level—classic signs of a false breakout caused by insufficient buying pressure.
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Key Characteristics of a Healthy Downtrend:
Price forms lower lows and lower highs: Each bounce is weaker than the last, confirming sellers are in control.
Volume expands on downswings: Red volume bars increase as selling pressure intensifies.
Volume contracts on relief rallies: Temporary upward moves happen on weak volume, showing buyers lack strength.
Essentially the opposite of a healthy uptrend: Momentum flows downward, supported by stronger selling participation.
Neckline: support line connecting the lows of the two shoulders
Trigger: Break and close below neckline
Target: Height of head to neckline subtracted from breakdown point
Volume clue: Usually expands on breakdown, weaker on right shoulder
Double Top (“M” shape)Two roughly equal highs with a trough in between
Neckline = support at the trough low
Confirmation: Close below neckline
Target: Height from peaks to neckline projected down
Highest-Probability Bearish Setups (in order)Head & Shoulders at major resistance with volume confirmation + RSI divergence
Evening Star at resistance on high volume
Double Top with neckline break on expanding volume
Bearish Engulfing on weekly chart at all-time high zone
Rising Wedge breakdown in overbought conditions
11月，Nvidia出现了看跌吞没模式，一个大的红色烛台完全吞没了一个较小的绿色烛台的主体。这在几个交易日中显而易见，特别是在积极的盈利公告之后，表明尽管有好消息，但卖家仍压倒了买家。
整个11月，Nvidia的价格始终低于其短期移动平均线（如20日均线），看跌交叉（短期平均线低于长期平均线）证实了趋势转变。
与趋势逆转一致的是，英伟达11月份价格大幅下跌，同时交易量也高于平均水平。这预示着强大的抛售压力，而不是简单的低成交量回调。
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價格形成較低的低點和較低的高點：每次反彈都比上一次弱，證實賣家處於控制之中。
成交量在下跌時擴大：隨着拋售壓力加劇，紅色成交量柱增加。
緩解反彈的成交量合約：成交量疲軟時會出現暫時的上漲，表明買家缺乏實力。
本質上與健康上升趨勢相反：在更強的拋售參與的支撐下，動能向下流動。
其实，不管市场是牛还是熊，读懂成交量和价格的互动，远比追热点重要。趋势读懂了，交易才会有底气。
The concept of a false breakout is equally important for avoiding traps. A price push above resistance means nothing if the volume doesn’t follow through. Just like the Bitcoin move from March 3–23, the breakout looked promising at first, but the lack of real buying pressure made the reversal almost inevitable. I’ve learned to always check volume before trusting any breakout signal.
Overall, today’s lesson reinforces how crucial it is to combine price action + volume when judging trend strength. Whether it’s spotting a clean downtrend or identifying a fake breakout, understanding the market’s “participation” helps me avoid chasing the wrong moves and improves my confidence in reading charts.
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