I am trying to decide which method should produce the most profit for a situation. If a stock is going up or should be going up over the next 6 to 12 months, would I make more money buying and selling almost daily, buy during the morning dip and sell during the daily high? OR Will I make more if I just buy it and hold it 6 to 12 months? I keep seeing it rise and fall and it seems many times the daily low will be lower than the previous close. Here is an example. It opens at $15.00 then dips to about $14.00 then later goes up to $16.50 and then will close around $15.50. Then the next day it will open at say $15.50 and then drop to $14.00 again etc... So if you buy a stock at $15.00 and in 12 months it goes to say $50.00, will you make more money buying on the lows and selling on the highs on a daily or every other day frequency or by just buying it and holding it until it reaches the target price 6 to 12 months later? I have wrestled with this for a long time, it seems that buying and selling frequently and locking in the profits from the swings would make more faster, especially when it moves up and down so much each day but the average moves up much slower. Please give me honest advice and help please, thank you all in advance. Rick
If you had a crystal ball and timed it perfectly, you would obviously make more day/swing trading. If it was that easy, everyone would do it. Let's say in your example you close your position at $16.50 near the end of the day. In the morning it opens at $17.50. Then what? Just one example. Let's say in your example you see it dip to $14 and buy, it drops to $13, then what? Just some questions to make you think. It is best, no matter what strategy you use, to find one that works for you. It's also best, no matter what strategy you use, to have a plan when you enter that position. What's your desired entry? What's your target? When will you admit defeat and exit (stop loss)? Anyone who doesn't have a plan for a trade/investment will be a long-term loser.
That is one of the issues I am dealing with. If I close at $16.50 at the high that day, then the next day it opens at $17.50 and continues to go up or stays flat, then I lost that $1.00 which is not good. If I buy the dip at $14.00 and it drops to $13.00 then I would just hold it until it goes back up or to an acceptable loss, which I prefer to avoid both, I have been bitten by that before. I am still holding stock from the Covid Crash just waiting to get to a place where I am ready to sell them. It is just painful to see my unrealized profit go up so high then at the end of the day it is much lower, and watch the cycle repeat. I am going to watch it for a while and also once I can sell my other stock to free up some money I may try the buy dip, sell high with another one I am watching also. If it works great, if not I can afford to hold it or miss some of the movement. Thank you.
