THE DIP KEEPS CATCHING THEM Add to strength, never to weakness. Keep your losers small and lonely. I stopped debating how I manage my trades out loud, and $NKEis a perfect example of why. Here's the pattern I see every time a name like this falls. It drops, and the reasons show up right on cue: it's a great brand, it's cheaper now, it can't go much lower. All of that can be true. None of it is the chart actually turning. $NKE has been sliding for months. It's drifted from the low 40s down toward the high 30s, trading well under its long-term trend the whole way. Every leg down, someone's there to call the bottom. And every time, honestly, the bottom just moves a little lower. The trap: cheaper feels safe. A falling stock in a company you know feels like a gift. But a name in a real downtrend isn't on sale. It's weak, and weak tends to get weaker before it gets better. What I actually do:nothing. I don't catch it, I don't average into it, and I'm not going to get cute shorting a falling knife either. My scan reads it as weakness, so I read it as a stay-away, not an opportunity. I watch the level where it would prove me wrong, and until it reclaims something real, I leave it alone. I used to explain all this. I'd lay out why I waited instead of buying the dip, and someone was always ready to argue that this time the name was too good to stay down. So I stopped arguing. The tape settles it better than I ever could. I let them talk. I watch the level. And more often than not, the dip they were so sure about keeps dipping. Adding to weakness feels smart in the moment. It rarely is. The discipline isn't loud. It just keeps your losers small and lonely while everyone else is busy explaining theirs. Not investment advice. Find more of my deep dives on my newsletter or why not study my guide 🍯🤓 🐝
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9 Comments
Gusta @gusta · 11d
May I ask what are you doing with your portfolio that it shows so much red?
Buythedip @buythedipzw · 11d
Okay here’s why it works for me, it’s at $40 so considering I bought now. Starting with Nike at $40 and it goes to nothing⬇️ * $40 → $20 = −50% * $20 → $10 = −50% * $10 → $5 = −50% Starting with Nike at $40 and it goes to its former glory⬇️ * $40 → $80 = +100% * $80 → $160 = +100% This coupled with the fact that you have a safety net. Drops 100%? Double the position. You’ll make up 50% of that dip. Continue that strategy down along with it and you’ll end up with 500 shares of Nike at $30 in 10 years saying “it seems obvious now looking back”
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