Hey BWS, not looking to defend my opinion on the matter. Was just providing the OP a solicited opinion on his proposed strategy. I don't consider a sub-$5 stock losing $1 of value over a span of weeks or months without any +$.10 up moves along the way, to be a rare event. But, I haven't looked at any charts for sub-$5 stocks in the last couple of years, so I wouldn't know with certainty if the potential scenario I thought up has happened at any point in that time. May be wrong or may be right.
Given that price movement in stocks is generally stochastic, I find the idea of it being "not rare" really odd. Volatility on a continuously falling stock is going to stay under 5% for weeks or even months? Seriously? I'd be willing to put some money on one or fewer occurrences in all of market history. But since without such a bet I'm not going to put in the time to scan for anything like that, we'll just leave it at "different opinions."
Hear ya, guy. When you phrase it that way, I'm inclined to agree that I'm absolutely wrong in my statement, and haven't thought it through. I have some bias against the proposed strategy, as I attempted a similar one to what the OP suggested and got absolutely buried towards the end of that particular leg in my trading journey, so I was focused on expressing a hypothetical worst-case scenario. I don't view my trading opinions to be worth betting on... Or worth much of anything to other people. So I try to never throw them out unsolicited.