Don’t Buy the Dip, Buy Strength After the Dip

I’ve never understood when people say, “Buy the dip.” This makes no sense. No one knows where the bottom is; no one has the magical crystal ball. Many people like to think they know, and they are full of BS.

If anyone tells you to buy the dip, run in the other direction. No one can predict the bottom until it’s too late.

The idea sounds good–“buy the dip”–but the reality is often very different. Too many times, you would buy a stock after a sharp decline, only to watch it keep dropping. The “good company” arguments won’t help your account balance. It is clear: buying unproven weakness isn’t a strategy, it’s a gamble.

Over time, I’ve come to learn that the markets reward those who wait for clear signs of strength. Instead of buying into fear and falling prices, I learned to wait for price to prove that buyers are back in control. That’s what I mean when I say “buy strength after the dip.”

don't buy the dip framed

I’ve been saying, “Don’t buy the dip, buy strength after the dip since the late 2010s and writing about it since 2020 and my conviction has only grown.

How do you know when strength has returned? For me, it’s about price action, not stories or hope. I look for higher highs and higher lows. I use tools like the anchored volume weighted average price (VWAP) from key pivots to objectively measure whether buyers or sellers have the upper hand. When price reclaims important levels–when the average participant from a prior high is in a winning position–that’s when I’m interested.

It’s not always easy to wait. Sometimes, you’ll see a stock move up without you. But discipline pays off. I’d rather miss a bounce than get trapped in a downtrend. The goal isn’t to buy the lowest price. It’s to buy when the odds are in your favor.

This approach has saved me from countless losses and helped me capture big moves with lower risk. If you’ve been frustrated with “buying the dip,” try waiting for confirmation. Let the market prove to you that strength has returned. Protect your capital and let price action, not hope or hype, guide your trades.

If you want to learn more, I’ve written extensively about this in my book, “Maximum Trading Gains Using Anchored VWAP,” and I teach Alphatrends members daily. Join us to learn more.

Trade well!

Brian Shannon

Brian Shannon
Trader, Educator, CEO & Founder of Alphatrends

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