Join Date: Jul 2015
Posts: 13,237
There are sometimes buy the dip markets and sometimes sell the rip markets. If you can pick which is which (or when it's nothing, which is more common), or if the market you're on aligns with your personality, you'll do well.
The pattern you note will be perfectly useful/profitable until it unwinds and you go broke trying to keep applying it. Confirmation bias is a serious cognitive flaw that humans have and happens in as little as a few trades.
The better way is to think about the factors that go into making people scared or hopeful or greedy and noticing where things are in that regard. That's a part of the equation - another is realizing when large holders are shifting assets and why. For example, the recent turmoil in the markets started exactly when bonds took out 52 week lows two months ago and an asset reallocation began as bonds returns got on people's radar and risk models had to be reweighted.