explain the flaw in this strategy please >>>

[MadJack]

2 times in the last 2 months i bought Ford Motor at or around $8.00 and sold after a 50 cent gain. this time i bought F at 8.02 back in december and sold today for 8.70, a $600+ winner.

now....i've only done this with 1000 shares at a time. i'm thinking about buying 10,000 shares the next time it dips to 8.00 or under and playing again.

is this bad strategy? that's a lot of money to risk is why i ask but, hell, even if it doesn't hit for me like it did the last 2 times, it surely will eventually. even if it takes 6 months or 2 years (which it shouldn't)

right? i mean....Ford will never go out of business so i don't think it's a big risk.

opinions?

reason - instead of making 500 a pop i'd like to take a shot at 5 dimes a pop.

 

[BADTODABONE]

Jack,

Read this earlier today and just saw on the news that Ford is to announce major job cuts somewhere around the 20th or 23rd of this month, maybe the dip in the stock price you are looking for, should be short term.

 

[dawgball]

A job cut with a company like Ford will not necassarily drive the price down, imo. I also think that the announcement that was made today is the one that will effect the price in any way that it is going to be effected (is it affected or effected -- I always confuse this!).

Jack-- I think there are several terms for this type of trading. One of them being Channeling. I remember one of the penny stocks that wareagle was on was making a killing for him in a particualr groove like this.

 

[MadJack]

I remember one of the penny stocks that wareagle was on was making a killing for him in a particualr groove like this.

yea, i watched that one (QOIL) and finally bought in at .50 and again at .375. i took a $4500 loss on 2/3 of my holding in december. i still hold 20,000 shares @ the current price of .30. i need about .75 to get even so am holding for now. this has been my only substancial loss since i started gambling with this account around may 2005.

Ford is starting it's dip again since i sold yesterday. i'll wait to buy at 8.00 or lower and jump back in for the "channeling" if that's what you call it. not sure how many i'll buy, just depends. i think with F you can't go wrong like I did with QOIL but i could be wrong. QOIL could go bust but F won't.

 

[selkirk]

have done this a few times and made two-four trades times. some stocks trade in a range.

one was a small cap brokerage firm, that traded in a 10% range every four weeks. the stock went to zero.

another stock after being in a range, sold making good gains, the one downside though is I sold and it continued going up another 50% over six months.

that is the biggest risk is you sell for 5%-10% and then watch as it goes 20-30% higher.
this can often be done with closed end funds. often these funds trade at a discount. traded one back when it had a discount of over 30% and sold when discount went to 24%.

now the fund CGI (on Toronto) trades below 12% discount. has performed well.

if you find a patern then not a bad idea to try.

as for Ford not going broke. even management has admitted that when they re-designed the ford f 150 that the whole company depended on the results.

Ford will not go broke this year, and are coming out with some good models. they will have to sell more cars. if oil stays high trucks and suvs will continue to melt.

also even though believe most foreign trucks are to expensive for what you get, people are still starting to buy them, honda and toyota.

if someone put a line that either ford or gm file for bankruptcy in 3 years,.......I would take it......hoping that I lost the bet.

thanks
selkirk

 

[dawgball]

When I find a stock that trades in a somewhat predictable range, I will try and accumulate stocks on the cheap. Basically, buying a certain amount at the low end, then selling a portion at the top and repeating. Once you accumulate the number of shares that you want, then you can let it ride for low risk.

Certainly not saying this is a great strategy.

I have actually been doing this with the GZFX stock. Worked well last week when it hit .02 and is back down to .01. I sold then had an order to buy more at .01 (which happened sooner than expected). Now I have a sell order for another portion at .02.

I also started an attempt with AMEP like this. Bought a few days ago at 0.05 and have a partial sell order at 0.10.

We'll see how it works out.