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.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
