Buying from the Bottom

The strategy of buying from the bottom is the cornerstone of any successful trader; when the market experiences a sharp decline and asset prices hit their lowest, a valuable opportunity opens up for you to enter trades at an enticing price, allowing you to achieve remarkable profits when the market rebounds. However, do not be deceived by the drop—purchases must be calculated within a comprehensive risk management plan, by setting a fixed risk ratio (1-2% of capital for each trade) and determining stop-loss and take-profit points in advance.

After seizing the opportunity at the bottom, patience comes into play: trading is not a race to capitalize on any short-term movement, but a journey that extends over the time frame you deem appropriate. Choose your time frame based on your style (#MyTradingStyle): a day trader for quick gains, or a swing trader to hold positions for days, or a long-term investor based on strong fundamentals.

To enhance your decisions, use technical analysis tools—such as charts and indicators (MACD, RSI, moving averages)—to identify reversal patterns and measure market momentum, alongside fundamental analysis that tracks economic news and supply-demand data. Sentiment statistics and the level of institutional flows can also provide you with an additional indicator on the timing of entry and exit.