Let's take this a bit further, since I have a couple of minutes here. Let's say you are bullish on a stock. A good one is ASND; great company, great products, great management, great employees, etc. You wanted to get in at 24 bucks in January, but you missed it. Then it ran to 50 bucks and you sat and watched and thought, "Man, I missed that, that was a homerun for sure."
At that point you could give up. Or, you could still be bullish on the stock and wait for a dip. You can get as technical as you want on where the dip will be and what it will go down to, but the bottom line is that if there is a significant dip on the stock, you want to own it. If it's at 50, you might buy it and hold on for a move up. But if you are a real pro, you wait for a dip (if you are bullish on the stock).
Well, that day arrived (twice!), and I was there. ASND went down to 30 bucks, but I thought it was a great deal anywhere under 35.
Let's say I bought some on those days. I missed that 6 month move from 22 to 55, but I didn't miss two chances to own it at 35:
techstocks.com
Now, let's say I'm bearish on the market in general, or I'm worried. If I owned it at 50, I'm hoping it won't take a dive and make me worry. If I owned it at 35, the guy that likes it on its next fast move above 53 will be buying his stock from me! I made 18 bucks on a 35 dollar deal in less than 6 months. I'll take that kind of gain all year long, thank you.
Then, I'll hold my cash for the next dip. They always happen.
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