You're downshifting to decelerate. What you want to do for economy is downshift merely to keep the engine revs up. As long as the revs are up, the ECU shuts off the fuel injectors and you use no fuel. You really don't want to get into "compression braking" to decelerate. The whole point of the exercise is to COAST as much as possible and use the DFCO (deceleration fuel cut off) feature of your ECU to use NO fuel while you're doing that.

SOoooo... it's actually better to stay in a higher gear so that the load of the engine slows you down LESS and you can coast "free" for a longer period.

It makes more sense when you can watch a real-time MPG display and see what's going on. It goes something like this: (typical modern small 4-cylinder)
Gentle acceleration from a stop = 14-18 mpg
REALLY gentle accel from a cruise = 25-30 mpg
Cruise = 30-40 or more depending on the car and the speed
Lift throttle coasting in gear above 1200 rshared_pm = infinite mpg (zero fuel)
Idling at a stop = 0 mpg!

Obviously, it is to your greatest benefit to extend the amount of time you spend coasting in gear vs doing anything else. Every fraction of a mile you spend coasting in gear is "free".

Watching the Scangauge in my car, if I'm on a typical city trip (under 25 miles total), every time I lift off of the throttle for 2-3 seconds, I gain about a tenth of an MPG for that trip. I lose between .5 and 1 mpg every time I stop and wait at a light, and about the same if I have to make a sudden stop (no "free" coast down to build up some mpg) and accelerated from it.

So, if I make a 20-minute trip and figure that the EPA rating on my car is correct... I'm starting at 29 mpg. If I can do a 3-second coast every 15 seconds or so, I've gained 80 tenths or 8 mpg just from that. Puts me up to 37 mpg. Of course gentle acceleration is good for an easy 10% in my car, too, so there's another 3 mpg. This is how I can easily get 40 mpg in the city in my car.

You're doing good by trying to not use the brakes, but if you're downshifting to slow down, you're STILL wasting momentum. Try to conserve and use as much momentum as you can.

Just got back from lunch, about 18 miles each way. Even with shitty holiday traffic, I managed to trip 49 mpg on the way there and 51.2 on the way home. Tank average is over 49 right now.