We have all heard that dip buying is the best strategy for 2017 so far. What does dip buying mean and when does it apply?

 

I am going to shortly discuss what trends I have noticed for when to dip buy. so far it is in the morning typically before 10am.

First pick consistent runners to watch pre market. Limiting your watch list to prior runners gives you two things. One is you know the hype is focused on these stocks so it will prevent false bottoms as much as possible. Second is you know that most likely the chances of the stock rising after the dip is good. 

Next thing is to study the stock's previous support levels from pre market and from previous day. I dont look at earlier than previous day support. This is to give you an idea of where the stock will most likely dip to so you can start calculating how much money you will enter at and approximately where you plan on exiting.

After that you wait for the dip to occur. When it does, dont buy at the dip. Buy at the first green bar after the red bar. This will do two things. One, it will confirm your prediction that the dip hit the bottom and is on its way up based on volume and Level 2 price action. Two, it will give you immediate feedback because if your trade goes negative at all whatsoever you should exit the trade position immediately.

 

I use 10% to 20% of my 60,000 dollar account when I do this strategy.