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I'd like to have some feedback on an idea I had. It is pretty simplistic, I gotta tell you. I am a good formula writer and this one doesn't require any. (shucks...)
I have tested and observed that there are many stocks (mostly high priced ones, you'll see why in a minute) which can be daytraded to yield a gain of 60% or so per year. That kind of percentage sounds good to me, probably for others too.
70% to 85% of the time, many higher priced stocks have a day high at least 1/4 above the open. It seems elementary to me that if you placed a market buy prior to the open, read your confirmation as soon as you got it to learn at what price you bought it, and immediately placed a sell order for 1/4 above your entry, you'd have a 70% to 85% chance of a successful sell order execution. This is assuming that the stock hasn't already moved higher than that by the time you place the sell order. If the market sours, you can exit quickly for a push or small loss (although stocks with a positive sloping mov(typical(),3,w) seem to do even better and avoid the open and move down all day scenario). (Hey, there's an indicator after all...) <g>
Assuming that we will only be successful 75% of the time (15 of 20 market days per month) and that the five days we are not successful we lose some capital (3 days' profits), we would be able to win at this system 12 market days per month (average).
$100,000 / 50$sh. = 2,000sh * .25 gain = $500 - 20$ comm. = $480 gain for the trade
$480 * 12 mkt days/month * 12 months = $69,120/year (compounding not factored in) on a $100,000 investment. NOT BAD...
Rotten side - you gotta have lotsa cash. My $10,000 just won't make it. Can anyone poke any holes in this "too easy to be true" system?
If you have lotsa money, please feel free to play this system and send me "thank you checks" so that I can build up $100,000 and play it too! <G>
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