Making money selling stock as simple as riding on 10 cent changes?

Question

Let's say there is a stock price that goes up and down just 10 cents every few days or weeks, at a pretty constant pace for several weeks or months. One day it's at $1.77, then a few days later, $1.68, then a few days later 1.79, for several weeks.

Is making money as simple as buying $1,000 of that stock when it's around $1.66, and just wait a few days/weeks (provided the pace is the same) until it's around $1.76 and then sell all for a 10 cent gain on the dollar for a total $100 profit? Then repeat?

Answer 1

You are almost describing the basic " tactic" or " strategy" of most " day-trading"... not necessarily ten cents here or there but jumping on little stocks ( in big amounts) on the days when you think/ predict that they are going to move... everyone has different signals...two or three bad days, big volume with cerain percentage gain, etc.... but then they BUY when they see the move starting ...hoping for 15, 20 even 30 PERCENT gains...( it happens !!)... and then SELL OFF.

...BUT, there are those days when things start to move...then falter... now you're in the " hole"... you have to make THAT up somewhere else just to get back to EVEN !...and the next trade could also falter...

...just saying...it's NOT EASY.

Answer 2

Its a 10cents change in price, but not a 10% gain...on that scenario you would only make around $60, and from that you would need to pay 2 sets of dealing charges, and possibly monthly fees as well, depending on which broker you use..

And you need to account for the bid/offer spread which may eat up most/all of the margin thats left.

I guess you may be able to increase your original 1000 if you get the timing right, but do you have the time to concentrate on it fully for such small returns? And is the stock liquid enough to be able to close out a trade immediately?

Personally I think you'd be better off going for building a researched, rational portfolio to buy and hold for the slightly longer term..