I do both dip buying and also averaging up as the stock price rallies.
For dip buying, i look at the chart and determine a few price levels i want to enter at. These tranches will have a fixed investment amount eg $1000 then $2000 then $4000, increasing as the price goes lower.
In a stock i like with a clear uptrend, i buy when the price retraces to the 20EMA. In a bearish price trend, I prefer buying in at support levels and at the 200SMA. I do not set stop loss order as these are stocks and companies or ETFs that i intend to hold for many years
For averaging up in a rally, i look at where the price breaks out of a consolidation pattern on big volume and buy in with half my investment amount, then when it retests the breakout level i buy again with the other half. Breakout trading is riskier as break out rallies can fail, so a stop loss is necessary.
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