Don’t rush to buy the dip!
After prices have been falling for a while, they suddenly rally for several days in a row, and you immediately think the bottom is finally in. Then some good news drops, making you even more certain that the market can only keep going up from here.
Just when you finally work up the courage to go all in, the market turns around and plunges back into a downtrend.
Why do you keep mistaking false bottoms for the real thing? Because you never base your entries on the actual trend—you base them on what you hope will happen.
After a prolonged decline, you want to buy the dip. After just two days of gains, you’re afraid of missing out. Once you’re stuck in a losing position, you reassure yourself that the long-term value is still there. The whole approach seems logical, but in reality, every step is driven by price fluctuations.
The most exhausting thing about a bear market isn’t the daily grind lower. It’s that it keeps giving you a few rallies that look just like the start of a bull market, lulling you into letting your guard down and piling all your money in—again and again.
So don’t just fixate on a few days of gains. Whether the price can hold key support after a rally, whether there’s enough buying to catch it when it pulls back, and whether the overall trend can keep strengthening—these details are far more reliable than how many people in the group chat are calling for a bull market.
Until the signals are clear, don’t rush to fill your position. Holding on to cash doesn’t mean you’ve missed out, and staying on the sidelines for now doesn’t mean your judgment is wrong.
What’s truly dangerous is having no confidence in your decision, yet forcing yourself to enter a trade because you’re afraid of missing out.
There’s an even worse situation: your account is already deep in the red, so you desperately search everywhere for evidence that “the bull market is just around the corner.” At that point, you’re not analyzing the market at all.
You’re just looking for reasons to keep holding a losing position. Don’t let an ordinary trade turn into a test of faith that you have to rationalize to yourself.
If the trend isn’t going your way, reduce your position. If your judgment was wrong, admit it decisively. Wait for a clear opportunity before acting. You don’t need to buy at the absolute bottom.
As long as you don’t slowly burn through all your capital with every false reversal, you’re already well ahead.
After prices have been falling for a while, they suddenly rally for several days in a row, and you immediately think the bottom is finally in. Then some good news drops, making you even more certain that the market can only keep going up from here.
Just when you finally work up the courage to go all in, the market turns around and plunges back into a downtrend.
Why do you keep mistaking false bottoms for the real thing? Because you never base your entries on the actual trend—you base them on what you hope will happen.
After a prolonged decline, you want to buy the dip. After just two days of gains, you’re afraid of missing out. Once you’re stuck in a losing position, you reassure yourself that the long-term value is still there. The whole approach seems logical, but in reality, every step is driven by price fluctuations.
The most exhausting thing about a bear market isn’t the daily grind lower. It’s that it keeps giving you a few rallies that look just like the start of a bull market, lulling you into letting your guard down and piling all your money in—again and again.
So don’t just fixate on a few days of gains. Whether the price can hold key support after a rally, whether there’s enough buying to catch it when it pulls back, and whether the overall trend can keep strengthening—these details are far more reliable than how many people in the group chat are calling for a bull market.
Until the signals are clear, don’t rush to fill your position. Holding on to cash doesn’t mean you’ve missed out, and staying on the sidelines for now doesn’t mean your judgment is wrong.
What’s truly dangerous is having no confidence in your decision, yet forcing yourself to enter a trade because you’re afraid of missing out.
There’s an even worse situation: your account is already deep in the red, so you desperately search everywhere for evidence that “the bull market is just around the corner.” At that point, you’re not analyzing the market at all.
You’re just looking for reasons to keep holding a losing position. Don’t let an ordinary trade turn into a test of faith that you have to rationalize to yourself.
If the trend isn’t going your way, reduce your position. If your judgment was wrong, admit it decisively. Wait for a clear opportunity before acting. You don’t need to buy at the absolute bottom.
As long as you don’t slowly burn through all your capital with every false reversal, you’re already well ahead.
