In simple terms
A dip is a quick fall or pullback from a recent price level. Saying that an asset is «dipping» describes the move; it does not say how far it will go or whether it creates an opportunity.
How traders use it
The phrase buy the dip may refer to a pullback inside an ongoing trend, but it can also describe a decline that continues because information, liquidity, or confidence changed. The percentage lost alone cannot distinguish the two. Compare the move with the plan, volume, and position risk before acting.
Limits and links
Buying while price dips does not guarantee the best final price: more selling, a gap, or liquidation may follow. Set size and invalidation first; do not average blindly. A sharp fall can trigger panic and turn a planned decision into an emotional reaction. See buy the dip.
Sources
- Investopedia, “Buy the Dip” — explains the idea and the risk of a continuing decline.
- CME Group, “Understanding Price Volatility” — introduces price moves and volatility.