Buy the Dip as a Swing Trading Strategy - Candlestick Patterns Explained by TechniTrader®

Consider Market Condition and Stock Trend Cycle

Buy the Dip is a very old-style strategy that is frequently touted as “brand-new” to new and beginning stock traders, novice swing traders, and new investors. The theory is that you want to “buy low and sell high”. But more often than not, new traders and investors discover that it is not as easy as it sounds. Does the Buy the Dip strategy still work in the modern and fully automated Stock Market today?

The answer is that it depends. Just because a stock or an index such as the Dow 30 Industrial Average has a few down days doesn’t mean it is time to Buy a Dip. There is more to this strategy than just rushing to buy a stock that has been moving down for a few days.

You need to consider these factors if you wish to be successful using a Buy the Dip strategy in the Stock Market today:

What is the current Market Condition, and where is the stock in its Trend Cycle? Just because a stock moves down doesn’t mean it is ready to resume moving up right away.

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Trade Wisely,

Martha Stokes CMT

Chartered Market Technician
Instructor & Developer of TechniTrader Stock & Option Courses