HowTo Buy the Dip

While the asset price is falling, it’s said to be in a “Dip” where prices are lower than the previous high. the main question is

  • Is there another Dip?
  • Should I buy here?
  • What should I do if it goes lower and create new Dip?
  • When should I stop buying the Dip?
  • When should I sell the asset?

Here we try to help you to make the best decision in any market situation. we try to make it simple without any complexity or hard-work.

Watch out the trend

Buy the dip in uptrends

Buying the dip is an old strategy to increase asset, but you must watch out of trend and using this strategy in uptrend.

uptrend: draw a line to connect all Dip (you need at-least two point) this called trend-line, when its broke then uptrend has been finished. Buy the Dip in uptrends.

downtrend: If long-term trend changed to downtrend each dip means there may another dip out there.
draw a line to connect all High point (you need at-least two point) this descending line called downtrend, when it broke to up, it means downtrend has been finished.

Note: after breaking a trend line it doesn’t mean that trend has been changed! When we have two high or two low and the possibility of drawing a new trend line then we have a confirmation of trend.

Note: It’s better to use line chart instead of candle stick chart. The trend lines are more understandable in line chart.

No Altcoin

Use it for bitcoin

“Buy the dip” strategy comes from bitcoin maximalist which said bitcoin only goes up in long-term, historically it was true till today. But as we know for altcoins it’s not true, most of the fall dramatically and couldn’t rise up in a good shape.

Altcoin: (Every coin except bitcoin) If you insist to use this strategy for altcoins (not recommended) make sure about their fundamental, innovation, top 20, and their survival in more than one BTC cycle.

Beware of crash

Do not catch a falling knife

Market falling is cryptocurrency look like disaster, Bitcoin falls more than 50% and other asset more than 90% ! No one want that, so when trend line break you should cash out.

Patience: Do nothing is better than do something stupid. It may cost all of your capital. so in downtrend just watch. I don’t like “short” (sell trade) but if you happy with that in downtrend you can go for it.

Use Indicators

Use RSI, trend line in 2 time-frame

Use simple indicators like RSI to make your strategy stronger.

Timeframe: In crypto higher time frame are so much reliable because of high volatility.

RSI: RSI is a good indicator to check out price saturation, use it to identify “DIP” when it’s lower than 30 it’s a good time to buy, upper than 70 is time to sell.

Multi Timeframe: Check higher timeframe like monthly and weekly, if they’re in uptrend you can buy the dip in lower time frame with peace of mind.

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