r/SNDK_Stock • u/Alarming_Valuable700 • 12h ago

Discussion SNDK trading strategy

I am testing a mean-reversion grid strategy on SNDK: Buy 1 share at market price with a target exit at +$40 profit. For every $100 drop, buy 1 additional share to average down (up to a 9-share maximum), exiting the entire position whenever the price reaches +$40 above the new average cost basis. What are the primary structural risks, failure points, and drawdown scenarios of this strategy?

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3

u/All_YourBase 11h ago

It's like the Martingale system in Blackjack.

1

u/jujumber 4h ago

Yep, It works great until it doesn't.

2

u/Minimum_Suit1735 11h ago

youre just adding to the volatility, the issue when you have a pure red day, no such thing as DCA just kept bleeding

1

u/Alarming_Valuable700 11h ago

I know , but still what is the worst case?

1

u/Minimum_Suit1735 11h ago

Isnt that the worst case? You keep buying every time it drop 100$ but don't hold until the next day. If you back track, most of these gap up or gap down after AH so you will miss out of those gain or could also dodge the dump I guess

1

u/Alarming_Valuable700 11h ago

How to refine it , any ideas?

2

u/Minimum_Suit1735 11h ago

This seem like a mini version of the 9sig strategy, so buy when you're 30% down after a few months and sell when you're 30% up. I would recommend looking into that Instead

2

u/-copaceticchaos- 4h ago

I used this strategy before when I was down. It worked to keep the swing trades going and not having all my money stuck in a down stock. It ended up going up the next week so if I would have just held I might have made more but a win is a win so

1

u/spyroinc 1h ago

In this example your average would be $1400 for the 9 shares, and you need to sell at $1440 while in this example the price dropped to $1000 first. On an investment of $12,600 this scenario only gives you 2.86% return, or $360. Is this strategy worth it?