What stops someone from just selling a stock at every peak and buying at every dip? Wouldn’t you be making money either way the stock goes?

Question

What stops someone from just selling a stock at every peak and buying at every dip? Wouldn’t you be making money either way the stock goes?

In: 3

Answer 1

In order to sell youd need to have a buyer. The difference between selling price and buying price is known as a “spread” If I sold say $10 on the market, at a $10 price I am especially lowering the price of my own stock (it I am the only seller that is) that SPREAD makes the difference. Remember markets have buyers and sellers.

Low demand for a stock means not much buyers and probably loads of sellers (or the price doesn’t move at all. High demand for a stock means loads of buyers and less sellers hence increasing stock price.