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Understanding Buy The Dip In TradingBuying the dip is a trading strategy where you take advantage of temporary price drops in an overall uptrend. The goal is simple: enter the market at a lower price before it resumes its upward move. It sounds easy, but knowing when and how to do it makes all the difference. In this guide, we’ll explore key setups, ideal market conditions, and smart risk management techniques to help you trade dips like a pro. 🚀 1. Understanding Market Structure 🏗️ Before jumping into a trade, it’s crucial to understand how price moves. A strong uptrend is characterized by higher highs and higher lows—this is where buying dips can be very profitable. But beware: not every drop is a buying opportunity. Some dips are part of a pullback, a temporary retracement before the trend resumes, while others signal a complete reversal—the last thing you want to buy into. Key levels to watch include support zones, Fibonacci retracement levels, and high-volume areas. These zones act as potential turning points where the price is likely to bounce. 2. Proven Setups for Buying the Dip 🎯 🔢 Fibonacci Retracement Support When the price pulls back within a strong trend, it often lands on key Fibonacci levels like 38.2%, 50%, or 61.8%. These act as natural support points where buyers step in. If a strong bullish candle appears at one of these levels, it can signal a solid dip-buying opportunity. Combine this with an oversold RSI and rising volume, and you have a strong case for entry. 🎭 Liquidity Grab (Stop Hunt) Markets love to shake out weak hands. Sometimes, the price dips below a previous low, triggering stop-loss orders before reversing sharply. This is called a liquidity grab—smart money accumulates positions while retail traders panic. If the price quickly reclaims the level it just broke, it’s a strong buy-the-dip signal. Look for big buy orders, a sharp recovery, and bullish candlesticks to confirm entry. 📊 Anchored VWAP Test Institutions often base their trades around VWAP (Volume Weighted Average Price), especially when anchored from a significant swing low. When the price revisits this VWAP in a strong uptrend, it’s a potential dip-buying zone. Watch for bounces off VWAP, rising volume, and confluence with other support levels for confirmation. 🔥 Point of Control (POC) Revisit Markets move towards areas of high liquidity. If the price revisits the Point of Control (POC)—the price level where most volume is traded in a range—it often serves as strong support. When price pulls back into the POC and finds buying interest, it’s a great spot to enter. Look for strong reactions, failed attempts to move lower, and confluence with Fibonacci levels. 📏 Previous Range Support A breakout from a trading range is significant, but the price often returns to retest the range high as new support before continuing higher. If this happens on low selling pressure and aligns with moving averages or VWAP, it can be a golden buy-the-dip opportunity. Look for bullish reactions, buying volume, and strong candles off the level. 3. When Buying the Dip Works Best ✅ Not all dips are worth buying. The best setups occur when: The market is in a strong uptrend, making higher highs consistently. 📈 Volume is high, showing that buyers are stepping in. 🔥 Macro conditions support upside movement, like favorable economic news. 📰 4. Risk Management: Protecting Your Capital 🛡️ Even the best traders take losses. What matters is how you manage risk: Set a Stop Loss 🎯: Always place a stop below key support levels. Position Sizing 📊: Never risk more than a small portion of your capital per trade. Have an Exit Plan 🚪: Know where you’ll take profits, whether it's at a resistance level or a trailing stop. Scale In and Out 🎢: Enter gradually instead of all at once, and take profits along the way to lock in gains. Key takeaways 🎤 Buying the dip can be a powerful strategy—when done correctly. The key is patience: wait for strong trends, allow price to reach significant levels, and confirm with volume and momentum. Combine technical analysis with solid risk management, and you’ll improve your chances of success in the markets. Happy trading! 🚀
CME_MINI:ES1!Education
by CandelaCharts
5
AUDUSD. Medium-term analysisHey traders and investors! It might be time to look for buying opportunities in the Australian dollar Weekly Timeframe Analysis The Australian Dollar (AUD) against the US Dollar (USD) has been in a sideways range since January 2023 (point 4 was formed). Range Boundaries: Upper Boundary: 0.71578. Lower Boundary: 0.61702 Range Vector Analysis The last realized range vector 6-7 was a seller's vector, which broke through the lower boundary of the range (0.61702). The weekly volumes of this vector are concentrated at the end of October - early November. Above the 0.65124 level, three weekly bars with increased volume are concentrated. A buyer's vector 7-8 is now forming, with a potential target of 0.69426. In the emerging buyer's vector, there are three bars with increased volume, which may indicate buyer interest at these price levels. The first resistance on the buyer's path on the weekly TF is the level of 0.65124, as above it, volumes are concentrated in the seller's vector, and this price level is slightly below the 50% mark of the last seller's vector. Daily Timeframe Analysis On the daily timeframe, the price has broken through the upper boundary of the range 0.63308, which formed in January. Range Boundaries: Upper Boundary: 0.63308. Lower Boundary: 0.60878 Range Vector Analysis The last realized vector 9-10 was a buyer's vector. The volumes are concentrated in the upper part of the vector. Note the daily bars on February 7 and 12, when the seller tried to start the implementation of their vector 10-11 with increased volume. The buyer absorbed these attempts and, on decreasing volume, broke through the upper boundary of the range 0.63308. Conclusions Buying (buying patterns) should be considered as long as the price remains above the upper boundary of the range on the daily TF - 0.63308 (priority option). This idea aligns with the implementation of the buyer's vector on the weekly TF. Selling (selling patterns) is risky, as the buyer's vector is active on the weekly TF, and the price has exited the range upwards on the daily TF. Even if the seller returns the price to the range on the daily TF, volumes under the lower boundary of the range may trigger a buyer's reaction. I wish you profitable trades!
by AlexeyWolf
PEPSIIII - Long Term Super Over Sold ConditionsThis play does not make the much sense to me via a fundamental perspective regarding the economic outlook of companies like PEPSI, Coke and $KO. But, from an investment standpoint, they control the food/drink market and have seen stagnant numbers and low growth regarding there products. Our new leader RFK Jr. in the food industry might start a complete overhaul of the products forcing these companies to rethink there targeted audiences/ marketing campaigns and adapt to this generations pallet. Short term it needs to build more structure and a foundation, on the other hand watch out for a V shaped reversal in the coming weeks. Target #1 - $155 Target #2 - $160 Target #3 - $170 Stop Loss - $140 Stay tuned for option position longs, I will personally be investing money in them as well.
NASDAQ:PEPLong
by LeapTrades
6
Everyone wants $20, Here are my thoughts...Making this without looking at earnings numbers or there so called growth. From what I am seeing in relative strength, $15 is the fair value price at the moment. I am expecting to see a gap down to the $15 area and have it slowly or quickly climb to $20-$25. If the inverse plays out, we will gap up to $20-$25 and then flash sell to $15 long term. Right now, options market is wanting. $20 for calls expiring 1-31. $18 for calls expiring 2-07. $17 for calls expiring 2-14. BUT... a very large position of puts, expiring 02-28, is at the $12.5 strike. I look at this as retail buying short term options expecting price to move there, while institutions have positioned themselves in longer term expiring contracts.
NASDAQ:SOFIShort
by LeapTrades
5
Weakness on DIS stockThe stock of Walt Disney Company looks interesting from the VSA point of view. The monthly chart shows that the price is now around the top of the horizontal channel formed after a year of down move (blue lines). On one side, there is professional buying in the background, which might resolve this sideways to the upside, but there is much more supply around market peaks from the other side, and that might lead to a down move. Deeper analyses of the price action over the last few months on the daily chart show massive supply. Moreover, the price went below the selling zone (red rectangle) and returned to its bottom on a low decreasing volume, showing an absence of professional interest to participate in an up move. So, to summarise it together: As of now, this stock is weak . With a big probability, the price may fall to the bottom of the monthly sideways channel first and if no buying suddenly appears while the price breaks the $79.24 level, it could reach the $20.0-$30.0 area then. If professionals buy around the channel bottom, the move-up will depend on the size of that buying, but will most probably push the price back to the monthly channel's top.
NYSE:DISShort
by VSA_Home
JUPUSDT Swing Long IdeaJupiter is the second largest DEX on Solana and its price has been ranging for almost 1 year. If all of crypto is getting ready to bounce JUP looks primed to breakout of the range, RSI is crossing above the RSI MA and midpoint, MFI is crossing above the midpoint, JUP has outperformed TOTAL according to MA Based relative performance, We recently saw the largest ever volume and volume MA. All of this makes me think JUP wants to breakout from this range soon, hopefully TOTAL and BTC will allow that to happen.
Long
by AltcoinDreaming
CAKE Ready for a Breakout? Cup & Handle Pattern in Play!Analysis: #CAKE is in a strong uptrend and is currently forming a cup and handle pattern on the 30-minute timeframe. This is a classic bullish continuation pattern, signaling a potential breakout. Key Observations: 🔹 Higher Highs (HH) & Higher Lows (HL) indicate a healthy uptrend. 🔹 Bearish divergence spotted—indicating a possible retracement. 🔹 If support breaks, we may see a trend reversal. 🔹 If the handle completes and #CAKE breaks out, it could be an ideal buying opportunity. Strategy: 🔹 Wait for breakout confirmation above the cup resistance. 🔹 Entry: On breakout with volume. 🔹 Stop Loss: Below recent HL. 🔹 Target: Measure the depth of the cup for a price target. Final Thoughts: This setup has high potential, but always use proper risk management. What’s your take on #CAKE? Will it break out or break down? Comment below!
Long
by mudusir
3
Strength on AMD stockAfter almost a year of down move, on February 5th 2025 a huge professional buying took place on Advanced Micro Devices Inc. stock (Ticker NASDAQ: AMD). Even though we've seen professional buying on that move before, the volume there was much lower and, as a result, caused small retracements up only. The volume on the February 5th daily bar has much bigger potential. Moreover, a few things are adding to the strength: - Recent buying appeared on the market opening after the earnings report with an immediate price rise. - The price returned into the area of big volume (blue rectangle) on relatively low volume, showing no professional interest in the downside (testing). Therefore, if no supply reappears below or around the $116.37 level, we may see a rally towards $150.37 - $153.03 and even higher to $166.10 - $167.08 zone. In case supply hits the market in the mentioned area, another professional buying could take place around $95.61.
NASDAQ:AMDLong
by VSA_Home
Potential 10X - 200X, Don't Miss EOSEOS has been stuck in a 6-year downtrend channel and a 4-year falling wedge. Volume has been drying up while price kept bleeding for years—most weak hands are likely already shaken out, meaning the supply is highly concentrated now. 📌 Current Setup: Price has bounced off the wedge and is sitting near the lower boundary of the long-term downtrend channel. If BINANCE:EOSUSDT closes a daily candle above the high-volume Feb 3rd level, it could signal the start of a major bullish move. ⚠️ No guarantees—always use a stop-loss and trade safely! But if this setup plays out, COINBASE:EOSUSD could easily see a 10x move and a potential to 200x in this bull run. 🔴 for more future script “guesses” like this! 😉
BINANCE:EOSUSD
by Harold_123
Scalper’s Paradise – Insights on Evolving Technical LevelsThis is my first post, and I’ll do my best. However, I might not know how to update the post or even view the comments. So, in advance, I apologize for any issues that may arise. :) Now, let’s dive in with a snapshot of a 1-minute chart. Here, you can see the developing VPOC line along with the VWAP line. These aren’t just random indicators—they are volume-based indicators, meaning the data comes directly from the exchange system. This makes them highly relevant for traders, as they provide crucial insights into market activity. But what exactly does this mean? The developing VPOC line (Volume Point of Control) represents the price level with the highest traded volume of the day. It is often displayed when using a Volume Profile. On the other hand, the VWAP (Volume Weighted Average Price) is a standalone indicator that calculates the average price based on volume. Essentially, the VWAP line divides the chart into two key areas: Above VWAP → Favorable for short positions (or considered expensive for long positions). Below VWAP → Favorable for long positions (or considered expensive for sellers). These levels help traders gauge price efficiency and market sentiment throughout the day. Insights from My Time as an Institutional Junior Trader As a junior trader in the institution, my job was simple: follow orders. This meant I was told what to trade and in which direction—I was responsible for executing the trades at the best possible price. Now, as an institutional trader, I execute thousands of trades a day, which naturally results in an average price due to the sheer number of trades executed at different price levels. So, how is my execution evaluated throughout the day? Exactly—against the Volume Profile and VWAP. For example, if I need to buy a large quantity and my executions are concentrated in the lower area of the VWAP-divided chart, it means I’ve done a good job—I’ve secured a better-than-average price. On the other hand, if my trades are mostly in the upper area, it means I haven't performed well, as I couldn’t even beat the average price. Let’s put on our thinking cap and bring everything together. Imagine you need to accumulate a long position, and you’ve been buying thousands of times, resulting in an average price. Now, let’s assume you are an institutional junior trader, and your boss instructs you to buy. You’ve already accumulated 85% of the position, and your average price is in the lower area of the VWAP-divided chart. Suddenly, the price has risen, and you have the opportunity to buy the remaining 15% at the VWAP. Would you take the trade? Of course, you would. Why? Because 15% won’t significantly move your average price, and you’re still buying at a reasonable level. And that’s exactly how institutional traders operate all the time. They are constantly evaluated against these key indicators (VWAP & Volume Profile)—just like I was. How You Can Apply This as a Retail Trader So far, we’ve discussed just a small aspect of trading, but now you understand that levels matter and that institutional traders think differently when it comes to buying. While retail traders often focus on getting the best price, institutional traders prioritize average price. This fundamental difference leads to completely different trading styles. Now that you know how institutions operate, you can start watching the key levels provided by indicators like VWAP and Volume Profile. These aren’t just static levels—they are developing levels, meaning you can use them multiple times throughout the day. Monitor these key levels throughout the session. Pay close attention to order flow when price approaches these levels. Identify who is in control—buyers or sellers—so you can take action accordingly. By combining these insights with the order flow, you can make more informed and precise trading decisions—just like the institutions do. 🚀 Sincerely, Marco
CME_MINI:NQ1!
by Marco_Boesing
24