Buy Weakness and Sell Strength

mahikarnam · 08-05-2008, 01:05 PM

Trading Pullbacks

Buying weakness and selling strength is the art of buying pullbacks. Stocks that are in up trends will pull back offering a low risk buying opportunity and stocks that are in downtrends will rally offering a low risk shorting opportunity.

As a swing trader, you have to WAIT for these opportunities to happen because…

Doesn’t it make more sense to buy a stock after a wave of selling has occurred rather than getting caught in a sell-off?

Doesn’t it make more sense to short a stock after a wave of buying has occurred rather than getting caught in a rally?

Absolutely! If you are buying a stock then you want as many sellers out of the stock before you get in. On the other hand, if you are shorting a stock then you want as many buyers out of the stock before you get in. This gives you a low risk entry that you can manage effectively.

08-05-2008, 01:05 PM	#1 (permalink)
mahikarnam Status: Senior Member Join Date: Jun 2008 Posts: 176	Buy Weakness and Sell Strength Trading Pullbacks Buying weakness and selling strength is the art of buying pullbacks. Stocks that are in up trends will pull back offering a low risk buying opportunity and stocks that are in downtrends will rally offering a low risk shorting opportunity. As a swing trader, you have to WAIT for these opportunities to happen because… Doesn’t it make more sense to buy a stock after a wave of selling has occurred rather than getting caught in a sell-off? Doesn’t it make more sense to short a stock after a wave of buying has occurred rather than getting caught in a rally? Absolutely! If you are buying a stock then you want as many sellers out of the stock before you get in. On the other hand, if you are shorting a stock then you want as many buyers out of the stock before you get in. This gives you a low risk entry that you can manage effectively.

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