What Is The Dip Buying Criteria?

Dip buying refers to buying stocks at a lower price (typically when it is crashing or moving down) in hopes to sell it at higher price later.

This is the goal of all investors and traders; however, it can be scary because if you buy it at the wrong time, the stock will continue to crash and make you lose more money than you planned.

There are two main dip buying scenarios:

• Buying A Crash: When the stock market is crashing, there is a point when the stock becomes a good buy and statistically has a super low chance of crashing again. The stock analyzer will alert you when the market or any stock on your watchlist fits this dip buy criteria!
• Buying A Dip: When the stock market is an uptrend and moving higher, there is a point when the stock dips a bit then continues higher. When this happens, you need to follow the dip buy criteria to make the safest and best entry you can. Read the specifics below.

Dip Buying Criteria (taught in the video above) - The UDDU Plan

U - Uptrend

The stock has to be an uptrend aka above the band for this criteria of a dip buy to work. This means the stock is moving and trending higher.

D - Dip

The stock then dips because it is natural for a stock to up then down then back up during an uptrend. This dip won't be anything major per se, just a few red candles.

D - Doji Candle

After the dip, a doji candle should be formed. A doji candle is an indecision candle where the wicks are long and the body is short. Ideally, the doji candle will form at a previous support level. In general, when a doji candle forms at any major price level (support or resistance), you should expect a bounce or reversal.

U - Upwards Push

Following the doji candle will be a green candle pushing higher. This is where you buy because now you know the market was moving higher, dipped and now it's showing it wants to keep moving higher.