Pullback
A temporary drop in a stock that is otherwise rising. Buying the dip means buying during or right after that drop.
In plain English
Prices rarely rise in a straight line. A pullback is a short step back inside a bigger move up. The idea behind buying it: get a strong stock at a discount, just before it starts climbing again.
Uncle Gary explains
Uncle Gary waits for the supermarket to put his favourite crisps on offer, then buys twelve bags. That is buying the dip. The difference with stocks: the crisps were always going to be the same crisps.
Why it matters for your money
In our test, buying strong stocks after a dip did no better than buying similar strong stocks on the same day without waiting. The trend did the work, not the dip.
Where we tested it
Related terms
All glossary terms. Educational content, not financial advice.