When Is It Safe to "Buy the Dip"? 🤔
Buying the dip can work, but only when you understand the structure behind the move. Not every dip is worth touching. Some are just the start of a deeper collapse.
🔍 A dip is worth considering when the price drops, then flattens out, consolidates, and shows signs of accumulation. You want to see buyers stepping in, selling pressure fading, and volatility calming down. This usually takes time.
Avoid dips where the price is in a straight freefall. No bounce, no consolidation, just a vertical drop with no support below. These are called falling knives for a reason. Catching them is gambling, not trading 🔽
Do not buy dips if 👇
1️⃣The chart is still printing lower lows with no pause
2️⃣Volume is rising on red candles but weak on green
3️⃣There's no clear support zone or previous structure to bounce from
4️⃣The selloff is driven by some very bad news
The safer entries come after the market has absorbed the panic. Once the range tightens and early buyers step in, risk becomes more defined. That’s when pros start building positions ‼️
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