How to Buy the Dip (with ZERO experience)

Finance-focused summary (dip trading / momentum trading)

Disclaimers / risk cautions

• Results shown are not typical; the trading results are “gross profit” and not typical (most traders lose money).
• Trading is very risky; use a simulator before trading real money.
• Don’t blindly follow anyone—take it slow and start small.
• Dip trading is described as riskier than “breakout / gap-and-go” momentum trading.

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Instruments / tickers mentioned

Stocks / companies

• Norwegian Cruise Line Holdings (NCLH)
• GameStop (GME)
• Tesla (TSLA)
• WAFU (Nasdaq-listed; used in a VWAP dip example)
• USEG (big mover; dip off VWAP)
• Pixie (panic sell-off / false halt example)
• SNDX (panic flush example)
• Unspecified stock (~$6.50 to $9) (technical pullback example; no ticker given)
• Unspecified “halt going down” stock (multiple panic/reversal examples)

Market instruments / indicators used (not tickers)

• VWAP (Volume Weighted Average Price)
• Moving averages (including 200 MA referenced)
• MACD
• Level 2 / market depth
• Circuit breaker halts / halting-down / halting-up behavior
• Psychological levels: half-dollar and whole-dollar price zones

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Core strategy framework: “Buying the Dip” (component of momentum trading)

• Primarily momentum-based:
  • Prefer stocks moving up quickly; avoid those moving sideways.
  • Dip trading is used to enter earlier than the breakout in some cases.
• The approach is broken into three styles:

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1) Buying a pullback off support (“dip off support”)

Goal: A strong stock pulls back to a known support level, then curls back up through new highs.

Common support / entry references

• VWAP
• Ascending/descending trendlines
• Double bottoms
• Half-dollar / whole-dollar psychological levels
• Often higher-quality entries occur when the stock is above VWAP

Risk management concepts used

• Stops commonly placed below support / the prior low.
• Avoid “catching a falling knife” by only buying where support is expected (e.g., VWAP, key moving averages, round numbers).
• Avoid dips during sideways consolidation where indicators converge (moving averages converge; MACD signals less favorable).

Step examples (execution described)

• Example: price moved roughly $6.50 → $9
  • Dip entry around a double bottom (example levels include ~$7.73)
  • Stop around ~$7.50
• Execution details mentioned:
  • Use a hotkey (shift+1) for quick starter buys (often ~1,000 shares)
  • Scale in aggressively after confirmation (adds near VWAP retests and higher pivots)

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2) Buying a panic flush / sell-off (higher risk)

Goal: Stock flushes hard (often with halts or near-halts), then springs back (“a spring right back up”).

Why risky

• Bounces don’t always happen; this can still be catching the falling knife.

Key traits / confirmation

• Flush includes instant large drops (examples: ~5% to 50% scenarios)
• Uses false halts and bid stack / market depth to judge strength
• Stop guidance:
  • Often uses the low of the panic flush
  • If it breaks that low, exit (avoid averaging down blindly)

False halt concept (explicit)

• When it appears to be heading into/at a halt, the stock may temporarily thin out and then resume (a false halt).
• Traders may add during the false halt / resumption move.

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3) Buying a reversal (“weak → turning around”)

Goal: Reversal setup near the low of day after selling pressure.

Entry rule

• Enter on the first candle to go green after 5+ consecutive red candles.

Stop rule

• Stop at the low (low of the reversal base / first-leg low).

Examples of reversal behavior

• A stock dropping from about $10 → $4.50, then bouncing ~100% to around $8.25
• Similar logic described for GameStop (GME): first green candle followed by a large bounce.

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Explicit numbers, price levels, and outcomes mentioned (selected)

Prices largely come from examples; targets are often described via psychological zones (e.g., 0.50 increments and round numbers).

VWAP dip example (WAFU)

• WAFU
  • VWAP ~11.85
  • Trading around ~11.94 shortly after open in the example
  • Starter: 6,000 shares, added in increments (example fills: ~12.06, 12.10, 12.11)
  • Stop concept:
    • Stock broke under $12, then reclaimed strength
    • Stop set around $12 (example risk: ~8 cents/share, about ~$480)
  • Adds / scaling:
    • Adds around $12.22–$12.25
    • Further adds around ~$12.47–$12.48
    • Later add around ~$12.61
  • Profit-taking:
    • Often sells/locks profit around half-dollar / whole-dollar levels and on rejection

Large pullback / retrace example (USEG)

• USEG
  • Rallied from ~$22 down to ~$9 (retrace)
  • Dip entries discussed around returning to VWAP and support

Panic flush examples (SNDX, Pixie, etc.)

• SNDX
  • Drops ~$17 → ~$15.86
  • Dip buy around ~$15.95
  • Target window: ~$16.25–$16.50
  • Described as about a 50-cent dip trade, exiting quickly (example implies ~$500 profit on 1,000 shares)
• Pixie
  • Mentions VWAP ~12.25 and psychological levels around 12.50
  • Starter buys and profit-taking during rebound
  • Caution about “bottom fishing” if it’s clearly still declining
  • Bid stack support discussed at $12.50, including halt/rebound behavior

Big reversal / halts examples (GME; NCLH)

• GME
  • Described as halted down, then resumed
  • Starter around ~$115, adds at ~$120–$128
  • Profit figure mentioned for that dip portion: ~$10,776
  • Later scaling described:
    • Entry around ~$144–$145
    • Adds; stop logic implied around lows and key levels
    • Exited around ~$150 (profit “about $45,000” mentioned)
    • Regret noted as price ultimately moved far higher (to ~$200)
• NCLH (2020 panic)
  • Dip trading during severe weakness: “first candle to go green” after halts/extreme sell-offs
  • Example bounce: ~$10.31 → $10.83 → over $11

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Step-by-step / rules explicitly stated (methodology)

Dip trading rules (Setup 1: pullback off support)

• Trade momentum stocks (avoid sideways action).
• Look for dip locations such as:
  • VWAP
  • Double bottoms
  • Half-dollar / whole-dollar levels
  • Ascending/descending support/resistance trendlines
• Prefer bullish bias when:
  • Stock is above VWAP
• Entry approach:
  • Start with a starter position near support (sometimes via quick hotkey buys)
  • Add on confirmation (e.g., reclaiming VWAP/pivot, breaking above prior highs)
• Stop approach:
  • Commonly place stop below prior low / support (examples include $7.50 and ~$12)

Panic flush rules (Setup 2: sell-off)

• Only participate when there is evidence of:
  • Spring back
  • False halt
  • Reclaim strength
• Entry often via:
  • Starter around VWAP or extreme levels after a hard drop
  • Adding on “break over” key levels (often near round numbers / VWAP / reclaims such as $12, $43, $15, etc.)
• Stop:
  • Usually the low of the panic flush
• Caution:
  • Avoid excessive bottom fishing when it’s clearly continuing to decline

Reversal rules (Setup 3: weak turning around)

• Wait for:
  • Low of day weakness
  • 5+ consecutive red candles
• Entry:
  • First candle to go green
• Stop:
  • At the low (cut the loss if invalidated quickly)

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Performance/timing guidance and trade management

• Key idea: dip trades can improve cost basis before the breakout, potentially increasing winner size.
• Exits:
  • Often scale out into half-dollar / whole-dollar levels and near high-of-day
  • Sometimes “sell on the ask,” with spread management (cancel/re-price mentioned)
• Adding is described as more aggressive and riskier; beginners are advised to start with:
  • one entry, one exit
• Momentum confirmation cue mentioned:
  • “first candle to make a new high” (often on 1-minute, sometimes 5-minute), especially around reversals/halts

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Presenters / sources

• Presenter: Ross (associated with Warrior Trading; referenced “Warrior Pro curriculum,” implying Ross from the “Hey Ross…” Q&A style)
• Company/source website: WarriorTrading.com
  • Strategy page: warriortrading.com/strategy
  • Mentions of curriculum/products: Warrior Pro curriculum, Warrior Starter, Warrior Pro
  • Chapter references: Chapter 8 and 9