The automatic buy low/sell high strategy is just one of the multitude I have studied; it is especially popular among financial commentators. Like other strategies, it has pros and cons.
Moreover, the procedure is not as simple to use as it appears, particularly when applied by average investors, who usually have difficulty in its implementation.
Studies do show that buy-low/sell-high strategy may return more, but it’s often haphazard, in-and-out market trading. It’s hard to be disciplined.
The natural tendency for anyone with a trading account is to stay attuned to the market and constantly, actively, overreact to its influences. Few investors, including professionals, can master that discipline, to determine highs and lows, amidst constant chatter.
The main disadvantage: Many of this strategy’s adherents are not disciplined. They thereby become common victims of market timing. The latter attempts achieve their investment goals only about 5% of the time, according to studies.(See the Earl J Weinreb NewsHole® comments and @BusinessNewshole at tweeter.)
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