When the market dumps in this nature, there are usually 2 things that the majority think will happen next. 1. Continues trending lower 2. V reversal straight back up The third scenario however is what majority don't think about or perhaps they don't want to accept it and that is chop. Chop causes more emotional pain for noobs than any other PA. At least with a large dump it's over with pretty quickly. Chop however can last for weeks/months. Every move higher gives a feeling of euphoria. Every move lower is depressing. You buy the high thinking it'll break out. You sell the low in a state of panic. When momentum is lost, it takes a while for that momentum to return. You want to see compression form. This can be viewed as a tight range. When a tight range forms, eventually one side will give in. What happens after that is key. (I'll let you work out what i'm talking about here). If a range forms and you have other bullish factors lining up, here are some things to consider when thinking about positioning.. 1. Buying at the low end of that range offers the best risk/reward. 2. Buying at the low end of that range is as close to where you're wrong on the idea. 3. Buying at the low end of that range is easier to deal with emotionally. It isn't always easy to position as it feels uncomfortable but it always the best area to buy in a range due to points 1 and 2 above.