July 3, 2015

Buying new highs / don't wait for correction

I feel far more safer buying stocks making new highs versus stocks making new lows. You have the benefit of following the trend and having the support of smart money.

But several times, people do the opposite... short a rising stock because it has to come down sometime or the other. So they want to make money on the short side completely forgetting the fact that they could not make money on the upside.

Or planning to buy the dips... as in "I am waiting for a correction or I will buy on dips".

As this chart of BAJAJ FINANCE shows, the correction never comes and the stock just keeps moving up.

Disclaimer: I did not trade this stock because of low volumes but I have traded similar setups. 

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