The bottom buying strategy is the cornerstone of any successful trader; when the market experiences a sharp decline and asset prices are at their lowest, a valuable opportunity opens up for you to enter trades at an attractive price that enables you to achieve significant profits when the market rebounds. But do not be deceived by the drop—purchases must be calculated within a comprehensive risk management plan, setting a fixed risk ratio (1–2% of capital per 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 benefit from any short-term movement, but a journey that extends over the timeframe you see fit. Choose your timeframe based on your style (#MyTradingStyle): a day trader for quick gains, a swing trader to hold trades for days, or a long-term investor based on strong fundamentals.
To enhance your decisions, use technical analysis tools—like charts and indicators (MACD, RSI, moving averages)—to identify reversal patterns and measure market momentum, alongside fundamental analysis that tracks economic news and supply and demand data. Sentiment statistics and the level of institutional flows can also provide you with an additional indication of entry and exit timing.
Your risk management plan must be applied in every trade, no matter how attractive the price looks.
Finally, document your trades and review them regularly to learn from each experience, and invest.