we reduce our market risk by waiting to act until we see money flowing into the stock (either to the long side or the short side).
acting before this occurs is far more akin to predicting...which we want to avoid.
prediction increases our own risk, anticipation based upon NOW (volume flow into the stock) reduces risk.
this is the basic premise of what we do anyway.
(this is not to say your analysis is or is not correct. it is just that the thought paradigm is inefficient. You acknowledge the hit to money velocity by entering and waiting so that is good.
here's the deal. as small investors we will lose if we try to compete with others on an information playing field. That is to say, (example) JPmorgan will ALWAYS be better and more informed about true value/prices of a stock than we will. We can't win against the monoliths in this manner, but we can follow their actions and profit as they bring old values to new values.
Read the Larry Harris book, we are parasites. embrace it, for it is good.
