Why This Bearish Trend Is Actually a Bullish Opportunity?Understanding the Multi Timeframe Analysis – Part 2 of 2
Alright from the prior post we talked about how the corrective move on the 4H timeframe turns out to be a bearish trend on the 1H chart. Now, let’s dive deeper into that 1-hour chart.
In this 1H chart, we can observe a trend shift from bullish to bearish.
Before the red arrow, we can clearly see a bullish structure:
Blue arrows continue to form higher lows, and
Orange arrows form higher highs (except one minor failure, which still maintains the bullish structure because price doesn’t break the previous low).
But everything changes after the red arrow:
Orange arrows fail to create new highs,
Blue arrows start forming lower lows,
→ confirming a bearish reversal on the 1H timeframe.
So… How Can We Use This Bearish Trend as a Bullish Opportunity?
Here's where it gets interesting — instead of seeing the bearish trend as a threat, we use it for better entry with an improved risk-reward ratio.
But here’s the catch – some conditions must be met:
Make sure the bigger timeframe (4H) still supports a bullish trend.
Wait for price to drop lower than the last blue arrow (prior low).
Look for bullish divergence + candlestick confirmation before entering.
Once you get the signal, you can place your stop loss below the confirmation candle to limit your risk.
What If Price Breaks the Orange Arrow (Prior High)?
If price invalidates the bearish structure by breaking the previous high, that means:
The 1H bearish trend is over.
The pullback on 4H timeframe is done.
And price is likely resuming the main bullish trend.
So, whether price goes lower or higher — you’re ready either way.
Alright, that’s my take on using multiple timeframes—hope it helps clear up any confusion you had! Let me know your thoughts in the comments. See you in the next post!
