After getting some answers to a related question, I thought I'd post a follow-up. It seems that if there is a low-volume stock, even with significant daily swings in stock price (e.g. 10-15%), one really can't take advantage of that to make any significant amount of money. In the previous post, I outlined a naive trade intended to make $1,000 off a $10k buy, but it was shown this would likely fail, even if the stock price would have increased by 10% had I not placed the trade. Another way to state this is that my trade would disrupt the stock price, and not in my favor at all.
So, that means I'd have to settle for a smaller trade. If I bought $100 worth of the stock, that size of a buy wouldn't be too disruptive. I might succeed and get $10 out of the trade (10% of $100). But my trade fee was $8 or so, so I only made $2 on this trade, despite the stock price changing by 10%, which is very high. I'd have to repeat this process 25,000x/yr in order to make $50k/year as a swing trader in this way. Maybe with computers I could do that, but it seems unlikely.
So, I would think there is some middle number between $100 and $10k that will produce a better return. However, I've shown that I cannot expect to get $1,000/trade. Probably not even $500/trade. So let's say I can make $200/trade. I'd still have to do this 250x/yr to make $50k/yr swing trading. That's about 5x/week, with no losses. Totally unrealistic.
So how do people make any significant money trading low volume stocks--if they even do? I assume money is made, since the stocks are bought and sold. I have some guesses, but I'd like to hear from the experts.