What are Buy the Dip Sell the Rip Strategies?

Discussion in 'Technical Analysis' started by bob2007, Sep 18, 2020.

  1. bob2007

    bob2007

    I.e. I think Stock X goes from 100 to 110.

    It goes up to 105 and sells off.
    Then it will resume to 107 and sell off and then hit 110.

    Should I be using Fibonacci or some kind of technical analysis?

    Lately I have predicted correctly, but once I exit I have no clue when to enter again.
     
  2. How do you make decisions to begin with?
     
  3. roca

    roca

    Check out the book "Technical Analysis using multiple Timeframes"
     
    bob2007 likes this.
  4. tomorton

    tomorton

    The location of re-entry into a trend is not critical, but obviously a better price gives a better profit.

    So in an uptrend, assuming you got out when a pull-back occurred, you could set a new buy order above the high of the lowest pull-back candle/bar. Or after the second or third successive lower range bar.

    A more aggressive approach would be available if you really know your market - if price has only once closed lower three days in succession in the last 100 days, you could simply buy on the second lower close. Or you could set a new buy order about halfway up the daily range from the last lower low. Or you could use ATR (or just your eye) to develop an entry level that accounts for recent volatility.

    Fibonacci will do these things but I feel a side-effect is it adds spurious scientific credentials and pseudo-accuracy to trading.
     
    bob2007 likes this.
  5. roca

    roca