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Many traders are pondering a question—how to precisely enter during a decline rather than blindly bottom-fishing? In fact, four low-buying strategies can solve most scenarios.
**Method 1: Enter after volume breakout and pullback**
The logic is simple—when the price breaks through a resistance level, it indicates strong buying pressure. A pullback at this point becomes a low-buying opportunity. But there's a trap: avoid doing this in a weak overall market, because breakouts can easily be false, and pullbacks may turn into trend reversals.
How to do it? First, the breakout should be accompanied by obvious volume expansion, and the price must stabilize for 1-2 trading days to be valid, preventing one-day spikes. Second, during the pullback, volume should decrease, and the price should not effectively break below support. Third, once a sign of stabilization appears (such as a doji, small bullish candle, or bullish engulfing pattern), or the price reclaims the support level, it's an entry signal.
**Method 2: MACD bullish divergence to find bottoms**
This method is specifically for long-term downtrends. The principle is—while the price keeps making new lows, the underlying momentum indicator (MACD histogram) does not make new lows, indicating weakening selling pressure and increasingly obvious bottom signals.
But note that long-term declines may show multiple divergences, so don’t jump in after just one. The operation requires at least two clear lows to confirm divergence, then wait for a MACD golden cross or a breakout above recent minor highs before entering. Avoid rushing in early, as this can lead to being trapped. Also, observe volume—divergence should occur during decreasing volume, and a breakout above highs should be accompanied by volume expansion for confirmation.
**Method 3: Stabilization at key support levels for low-buying**
Support levels seem simple but require careful attention. What is a reliable support? Long-term moving averages (like the yearly or half-yearly MA) or previously tested lows (at least touched twice without breaking) are considered reliable.
However, there's a reality—support levels are not infallible. In weak markets or when negative news hits a stock, support can be broken. Once broken with high volume, stop-loss immediately—don’t hold onto false hopes.
Entry timing: when the price stabilizes near support for 1-2 days, or shows signs of volume-driven rebound. It’s recommended to start with small positions to test, confirm support effectiveness, then gradually add positions—this controls risk better.
**Method 4: Uptrend with intact moving averages as an opportunity**
This is the laziest but most effective method. The core logic is—if the price doesn’t break below key moving averages, the uptrend remains alive. When a pullback occurs near the moving averages, it’s time to consider entering.
What are the specific conditions? The moving averages should be in a bullish alignment (short-term above long-term), the price should stay above the moving averages for a long time, and each pullback should not effectively break below MA10 or MA20. During pullbacks, volume should shrink, and the price should approach or touch these MAs but hold firm, or re-establish above the 5-day MA. If volume during pullback is very small, you can enter slightly earlier, as such volume contraction usually indicates limited depth.
**A few general reminders**
These four methods may seem independent but follow a common principle: volume expansion to break balance (breakout or rebound), volume contraction to confirm pullback (correction or consolidation). Volume is always the first line of defense—if you can’t read volume clearly, don’t rush to act. Also, always keep risk awareness in mind—support can break, divergences can fail, trends can reverse—that’s normal. Set stop-losses, control position sizes, and maintain a calm mindset—these are more effective than studying a hundred strategies.