Buy The Dip! – Most Secure Trade Entry Strategy

In every chart, no matter which tradable asset, there are recurring wave patterns all the time, on any time frame. Beyond the classic crypto breakout scenarios – for which everybody is waiting all the time, with bull runs up to several hundreds to thousand of percentages – you can trade retracements generally, within impulsive price movements.

Due to the wave nature of price movements, reversals occur frequently.

When price has just fallen in a wave down, usually there will be a point where it bounces back up, more or less. The low of that bounce can be used as an entry.

Use tools to check the likelihood for that point to be the low of the wave, like with Fibonacci levels (has price hit a certain level?), the StochRSI (the lines might cross on the lower time frame you are watching and be in the oversold area), or reference the Ichimoku Cloud.

A dip gets confirmed by the next few candlesticks. The area short after the obvious turning point would be your trade entry.

What goes up – must come down. Highs and lows play together all the time. The recurring lows are used as entry areas in overall upward trends. That’s what they call “Buy the Dip!“

If you focus on only buying dips, you can never make too big mistakes. Price should at least go up a little further, if you bought shortly above the reversal point of the dip. That means that in most cases you are able to move up your stop loss order to break even very soon. Then you can simply watch if the trend goes on or if you get stopped out, without the risk of any loss.

Image of the Dip Buy Strategy

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