DON'T BUY THE DIP

It’s a widespread saying that history repeats itself, but it’s not always true, especially when you’re talking about the market.

The idea of buying the dip is based on the premise that a stock’s past performance is indicative of what you can expect in the future, but that’s not always the case either.

Unfortunately, this false premise is why even the best of the best traders often make losing trades. When a dip appears, you may think it’s a good time to buy, but there’s no telling when or if the dip will correct itself. Sometimes a stock’s price goes down and stays down — or goes even lower.

What is BUYING THE DIP ? 

BUYING THE DIP is a strategy used by investors and traders that involves buying or ADDING TO AN EXISTING LONG POSITION of an asst during a period of downward price pressure , Hopefully with the opportunity for the price to recover



This Strategy works greats when the stocks are in an UP TREND

BUT....

When the stocks are in a DOWNTREND . The DIPS KEEP ON DIPPING . You will end up Getting TERRIBLE LOSSES 

SOLUTIONS  :- 

1 ) ANALYSE THE TREND

2) PICK FUNDAMENTALLY STRONG STOCKS 

3) ALLOCATE FUNDS TO BUY MULTIPLE DIPS 

4) DEVELOP AN EXIT PLAN BEFORE ENTERING
 
5) DEFINE A LOSS LIMIT