Many investors want to “buy the dip,” but not every decline is an opportunity.

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Many investors want to “buy the dip,” but not every decline is an opportunity.

Getting in after a correction is a core part of structured investing.
Many investors want to buy a dip, but without analysis of support and resistance
A correction is often confused with a trend break.Getting in after a correction requires structure, discipline and objective analysis.
In the video on this page, Mark explains when a pullback occurs within an upward trend
a healthy entry point forms — and when not. As a practical example, the following is examined: Adyen (Euronext Amsterdam),
where horizontal support and resistance zones clearly show
how a correction towards support can constitute a rational entry,
subject to confirmation.Watch the full video (35 minutes) above with explanations and practical examples.

What does entering after a correction mean?

A correction is a temporary decline within an existing upward trend.
After all, markets never move in straight lines.
Even strong growth stocks like Adyen are experiencing setbacks.

The important thing is not that there is a decline,
maar how this decline takes place within the broader market structure.

Adyen as an example of support and resistance

In the graph above you can see how Adyen clearly
horizontal support zones visible via the SupRes indicator.

When the price falls back towards such a zone:

• Test the market for previous buying interest.
• It becomes visible where volume was concentrated.
• Creates an objective reference point for risk.

Only when stabilization occurs,
can a relapse evolve from a “decline” to
structured entry point.

When is it healthy to enter after a correction?

A healthy correction usually shows the following characteristics:

• The long-term trend remains intact.
• Support zones are respected.
• The decline is controlled, without a panic structure.
• Relative strength remains stable against the market.

For example, at Adyen we see how previous support zones
served as a pivot point several times,
which gives structure to the decision-making process.

The importance of confirmation

Getting in “because something has dropped” is not a strategy.
Boarding after correction means waiting for:

1. Technical support or consolidation zone.
2. Stabilization of the price trend.
3. Possible breakout of a short-term downward trend line.
4. Confirmation via volume or relative strength.

Without confirmation, a setback remains just a decline.
With confirmation it becomes an opportunity within a structured approach.

Common mistakes when buying a dip

• Entering too early during an accelerating decline.
• Not distinguishing between correction and trend break.
• Enter without a predetermined risk level.
• Reacting emotionally to news.

Also with well-known shares such as Adyen
a decline can quickly escalate when support breaks.
Structure prevents impulsive decisions.

Corrections as part of an investment process

Who invests in a structured way,
does not see corrections as a threat,
but as a natural part of market dynamics.

The combination of:

• Trend definition
• Support and resistance analysis
• Relative strength
• Risk management

makes boarding after correction
not a gamble, but a method.

Further training and further education

Anyone who wants to integrate this methodology into a regular investment routine,

A contribution about relative strength stocks:
Where does capital shift?

And on the next page an overview of training courses and workshops
around structured investing and technical analysis.

View the training courses and workshops on learning to invest

Getting on board after a correction – FAQ