Another potential strategy?
So I'm reading reminiscences of a stock operator (thanks aiki for recommend it). And last night Livingston was talking about another speculator who would always have a stop loss on all of his investments at the smallest fraction of a movement downward, so every time a stock would go down he would get rid of it right away. This seems like a pretty good idea to me as long as you had a small enough position that you could get rid of it before losing a lot more money. So I was thinking what if you only bought stocks the moment they begin to go up, and always sell the moment they head down. You could also short them when they go down if you want to. Maybe this would work because most movements obviously are greater in magnitude than the very small movement that you would know to sell or buy on, so you would be able to ride the rest of the movement and then sell when it began to head down again or vis versa. It would be a day trading strategy obviously. I don't know a lot about day trading so I have no idea if it would work or not, it was just an idea. If you had a big enough stake that you could earn more than the expense of commissions which would be a lot, then it seems like it would be a pretty surefire way to make money. It wouldn't work if you were trading too much stock though. Why or why not would this work? Thanks.
