After a market dip, many traders fall into the trap of buying during a temporary surge, mistakenly thinking it's the start of a full recovery. This bounce often results from panic buying and speculation, driven by FOMO and emotions rather than strong market fundamentals. While the surge may seem promising, it is often short-lived, followed by another dip or flatline. To avoid this trap, traders should remain patient, assess the broader market trend, and ensure any rally is backed by solid news or real demand. A well-thought-out trading plan with clear entry and exit points is essential to mitigate emotional decision-making and increase the chances of profitable trades.
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