As this is all new to me I wanted to run this past you to see if it makes sense.
Is there any benefit to Selling and Buying back or am I just losing on the spread (difference between the Sell rate & the Buy rate), example:
I buy 100 shares of KYJ @ £55 each. Total outlay £5500 for 100 shares
The price rises and and it then looks like it will drop because a of shooting star indicator.
I sell 100 shares @ £60 each. Total income £6000 (Profit £500)
The price does drop and I buy back the shares @ £53. Total outlay £5300 for 100 shares.
Does this mean I just made another £200 as I originally had 100 shares for £5500 but now have the same for £5300, it doesn’t does it, it’s just freeing up cashflow right, it’s not actual profit is it?
So now the shares rise again to £59 and I close making another profit of £600
If I had just kept the shares from the original purchase and not done the sell and buy back thing then I would have only made £400 right (£59-£55 x 100 shares = £400)
Maybe by writing it down I can see the answer that I have in fact made £1100 which is much more than just hanging on to the shares over a longer period, but still good to get some views on this and if it works in reality.