Whenever you place a Buy order, you need to be aware that someone else is selling to you. Regardless of the price at which you buy, at any given point, whether high or low, you are replacing the previous buyer’s position who sold to you.
If you buy at a higher price, you are essentially replacing someone else who bought at a high price. No one can precisely know where the peak or the bottom is.
The issue for individual investors is that they never know whether their buy orders will result in profit or loss in the future.
As prices rise, the amount of capital flowing in needs to be larger. Therefore, if you want to exit, it requires a significant amount of new buyers to replace your position at increasingly higher prices. If no one is willing to replace your position, you are left holding at a high price without liquidity.
Always remember:
Buy a good stock (commodity) at an average price,
Instead of buying an average stock (commodity) at a good price.
