What is buying on a dip?

Buying on a dip is buying in an uptrend when prices pull back to support. What then is support? I define support as being the price where the fast band of moving averages, being above the slow band, comes down to rest on the slow band. The S&P500 market is illustrated below on a 20 day 4 hour chart. Here each candle represents one-half of a trading day. The best place to buy on a dip is on the first dip in an uptrend. This is a great place to add to a profitable position if you got in soon after the uptrend began – a place I call the sweet spot. It is important to not confuse buying in a downtrend with buying on a dip. Click on chart to enlarge.