A downtrend is the mirror image of an uptrend: lower highs (LH) and lower lows (LL). Each rally fails below the previous peak and each decline breaks the previous trough. Sellers are in control and each bounce is being sold into.
Why the lower high matters most
In a downtrend the lower high is the key tell: it shows that sellers stepped in early, capping the bounce before it could reach the previous high. A rally that stalls into a fresh lower high often offers a favourable short entry with a clearly defined risk point.
Using it in practice
Traders often wait for a bounce into a lower high, watch for selling to resume, and place a stop above that swing high. If price makes a higher high instead, the downtrend structure is broken and shorts should be abandoned. Shorting a falling market carries its own risks, so size positions carefully.
As long as price prints lower highs and lower lows, the path of least resistance is down.