How Many Ways to Get to The Bottom?
When looking to buy a stock making a pronounced downward move, picking a bottom can be risky. If you're impatient or in some other way not careful, you leave yourself vulnerable to breaking one of the cardinal rules of trading, which is to never catch a falling knife . Still, a rapidly dropping stock has to stop somewhere and begin to reverse. Traders with experience at reading charts will be able to spot reasonable areas at which a falling stock will stop, but unless that stock is headed straight for zero, deciding on the ideal technical area to buy can be tricky. Since no two stocks are exactly alike and one trading session will often have little resemblance to the next, what may have been the proper strategy on one day, or with one particular stock, will quite likely not work the next day or with a different stock. While you might be confident in the areas that your charts show you, where a stock actually ends up can be anybody's guess, especially when there are multiple a...