The buy on the dip strategy explained

By Steve Sosnick, Chief Strategist, Interactive Brokers

Steve Sosnick explores the trading rationale behind the buy-on-the-dip strategy.

When the US Federal Reserve has a dovish monetary policy or a stock is on a long-term up trend, buying when the stock market has a down day can be a profitable long-term strategy.

That said, there are caveats. As Sosnick tells it: “That’s a strategy that works really well, until it doesn’t.”

Photo Credit: Pictures of Money via Flickr Creative Commons

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