The “Buy the Dip” Trading Guide (and what not to do)

One of the most popular trading strategies among people new to the markets is “buying the dip”. Look for a price that is strong and then wait for the price to come back down (”dip”) before buying. The strategy itself is very simple on the surface and can yield quality results. With that being said, it’s also not nearly as simple as it appears, especially if you’re just getting started as a trader. I wanted to put together a “Buy the Dip” Trading Guide, but with a twist: what not to do! To best illustrate why this strategy can be great, yet harmful, I want to walk you through a small journey of a trader who was using the “buy the dip” strategy. This journey will reveal several angles that need to be considered and understood if you are to have long term, consistent, results. Let’s take a deeper look at this trading strategy and make sure you are not overly simplifying it.