WEALTH UNIVERSITY

[serpico1127]

I'm neither wise nor experienced, but...

When someone says "buy the dips" they mean buy the stock when it pulls back. Remember, nothing goes straight up forever. And the straighter up something goes, the harder it'll eventually fall. (Not a hard and fast rule, but something to keep in mind). When it does come back down, that's when you buy. Chasing something on the way up is how we become bag holders.

"Buy the dips" also refers to intraday action. A downtrend, however, is a prolonged period of downward action. Something trending down can last weeks, months or years. The DJIA saw serious downward movement from Oct. 08 to March 09. Simply: more sellers than buyers caused by a lack of confidence in the state of our economy. Also, just because a stock has fallen in price for several days does not mean that it's in a down trend.

If you really want to see the difference, start learning how to read charts. It'll change the way you trade...

Good luck.