You talk about you seeing the offer being HIT, thinking that it will go up. I'm sure that you are right, however if you didn't know that the stock price is 50/50 to go up vs down. Spec, you're a smart guy on hear. I hear many of your 100 or so post, however, I still stay with my statement "your expected value is the same when you hit the bid or chase the bid being in last position"
OK, You feel the reversal (or get a signal), and you shoot a limit order on the offer. Lets see what odds are: 1. Price goes up (in your favor): a) you cannot quickly cancel your order and get a fill (and still pocket the spread) b) you quick enough to pull out your order, and you keep the profitable position. 2. Price goes down: a) you hit the bid and pay the spread b) you chase the offer and get a fill within spread c) you chase the offer and go below minus tick, thus paying more than spread (and still without any guarantee that a buyer will hit your offer). Which scenarios you hit in real life? I'll bet the worst ones, because the right way is to sell on the way down and you already losing the money. Why wait? Aggressive seller will shoot market orders on minus tick leaving you way behind the desired exit point. Again, don't forget about autobots that are blazing fast and will step in front of your offer (by improving the price or shooting market orders). Just my $0.02