Buying The Dip - The Right Way

Buying The Dip - The Right Way

By Seven-NATE-Nine | Invest with Nate | 22 Sep 2021


The value of Bitcoin has dropped and the charts have printed red candles over these last three days.

You’ve seen the memes. “Buy the dip” is a common phrase that is used among investors and traders alike.

“Keep calm and buy the dip!”

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“Buy the f***ing dip!”

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Is this the time to buy Bitcoin? Have you ever “bought the dip” only to realize the asset continued to drop even further?

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It is impossible to buy the bottom every time. What is the right way to “buy the dip?”

Buying dips is in fact a sound strategy. “Buying the dip,” or buying something that is going down can be a sound strategy because the expectation is that it will reverse because it’s gone down too much. Looking back at previous dips in the history of Bitcoin show that the most profits were gained from buying these lows in price.

It is not a good strategy to buy every dip that occurs. The crypto market can be volatile and what may seem like a minor dip may not be.

“Don’t try to catch a falling knife”

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When it comes to dips, exercise patience before quickly going in to buy.

Technical analysis can also help you determine where the dip may bottom at before the trend reverses.

Technical analysis can help you see the trends- If a market decline fails to penetrate the most recent higher low, then the trend is still intact. Trying to “buy the dip” when that dip breaks the longer-term market trend is typically a losing strategy.

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Keep in mind that it is impossible to time the market correctly and sell at the absolute top and buy at the very bottom. The lesson I learned early on in my trading days is to buy in sections (also known as dollar cost averaging). Spread out the purchasing of said dips over a period of time so that in case the price does go lower you’ll still have the funds to purchase the even further discounted price. If the price goes up at least you still locked in a lower price overall.

September is historically a red month for Bitcoin.  This may be a good time to add more Bitcoin to your portfolio.

Always expect the unexpected.

Stick to your plan. Take profits. Set your stop losses. Don’t get greedy.

Thank you for your time! If you found this article interesting or helpful in any way please let me know in the comments below. Feel free to follow me for more articles on how I invest or how I earn other free rewards such as crypto, stocks, or gift cards.

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*Disclaimer- I am not a certified financial planner/advisor, certified financial analyst, economist, CPA, accountant, or lawyer, or anything important for that matter. The contents of this article are for informational, educational, and entertainment purposes only and do not constitute financial, accounting, or legal advice. Always do your own research.*

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Seven-NATE-Nine
Seven-NATE-Nine

Crypto Enthusiast and Aspiring Day Trader. Also Passionate about Family, Love, Life, Movies and Video Games. And Pets.


Invest with Nate
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