Entry Method #1: Buy The Dip on Uptrend (Page 82)

"Buy the Dip on Uptrend" is the first Entry Method taught by Adam in his WAI Workbook, as shown on page 82.  The reverse is "Sell the Rallies on Downtrend" - the rest of the article focus on Going Long on an Uptrend which you can invert for selling rallies on downtrend.

Setup & Entry
1. Find Uptrend
2. Find Support.
3. Wait for Dip.
4. Observe price action near Support.
5. Buy after bounce off Support if Reward > 2 x Risk .

Trade Beliefs
Van Tharp likes to say "You can only trade your beliefs", so, if you don't believe in the following, you are unlikely to be able to execute this trade successfully over the long term:
1. Uptrend improves winning odds of being long.
2. Dip improves Reward to Risk Ratio (RRR).
3. Bounce off Support is necessary to provide confirmation of Downtrend reversal and resumption of Uptrend.
4. Even if both are the same price, Buying on Uptrend (Paying Up) is safer, more time-efficient than Buying on Downtrend (Buy on Discount).

Making the Trade Happen
Minimum steps required:
1. Find stock on Uptrend (e.g. SPY or DIA or IWM)
2. Plan/analyse/find Support.
3. Plan/decide Entry Price.
4. Plan/decide Support, ATR/Gap, Stop Price and Risk/share.
5. Plan/confirm RRR exceeds 2 (usually the case if buy near Support).
6. Plan/decide $$$ to risk per trade (when Stop is executed) and Position Size.
7. Execute Actual Buy after bounce off Support.
8. Monitor/Manage trade after Entry - occasionally raise Stops and/or Profit take if necessary.
9. If necessary stopped, accept loss (if any) and move on to the next trade.  If profitable, move on to the next trade.

Typical Question
Question: There are many support where the Uptrend is still intact - which one should I use?
Consider E-minis (/ES = S&P500 Futures) below which has been on an Uptrend.

The close is 2040, and there are at least 5 levels of support where the Uptrend still intact, so, which one should I use?
1. 61.8% Fibonacci Retracement = 2028 - 12 points to go.
2. 200-day Moving Average = 1997 - 43 points to go.
3. Previous Low = 1974 - 76 points to go.
4. 127% Fibonacci Expansion = 1935 - 105 points to go.
5. 161.8% Fibonacci Expansion = 1885 - 155 points to go.

Answer:  Always let market tells you which Support will hold.  Meanwhile, the trader can anticipate and plan in advance, so that s/he is prepared to execute the trade when the conditions are correct.  If support holds and bounce up, the up-move will usually be fast due to other traders that has already prepared in advance, that you are likely to miss the move, it if you don't know what to look for.

Question:  How do I know I am not catching a falling knife, that the support is not the lower support and current bounce off the current support is just a dead cat bounce?

Answer: 
First, there are no guarantees, no sure thing in trading - that's why the trader always pre-define the trade risk first, keep that risk constant per trade, and accept the possibility of necessary losses, before putting on the trade.   The trader relies on the long run returns, not the outcome of one individual trade.

Second, there are a few things you could do to tilt the odds of winning for every trade, but even then, it is no sure thing:
1. Wait for the right entry point where price has confirmed bottom - this means picking up things when it's more expensive than the bottom.
2. At the very least, a confirmed reversal candlestick pattern should appear on the Daily charts.
3. You may get confirmation at the more detailed time-frame, such as Hourly Charts.  In this smaller time-frame, you may look at 1-2-3 Change in Trend Pattern, or wait for EMA20 to cross over EMA40, or other entry methods.  You may want the MACD to show you certain bullish signs first, or anticipating good odds of happening.  You may want the RSI/Stochastics to show certain signs first also.
4. Look for a good setup where your experience tells you that either the bottom is near, or it's going to be a good bounce.  There is no substitute for years of experience.  Certain indicator actions may indicate this, but is not full-proof.  Things outside the charts, fundamental news, market tone, sometimes provide clues too.  Instincts and gut feel sometimes play a role too.  Direct experience can only come from repeated self-practice and self-awareness.   Be aware that you are competing with many professional traders globally for finding bottoms and bounce if you trade popular products like SPY, those more skilful and better prepared will get the quicker bite.