There are traders who do this and are traditionally tied to their auction house, and swear by the method. I dislike it; but accept that it happens. (Losec ganking happens too - it doesn't stop me from going to low security systems though). I do have a variation (below) that I am comfortable with.
If you are curious about small over/undercutting; it is worth looking at how the professionals do it in first life. It is called High Frequency Trading.
This article at slashdot has some 'interesting' discussion and links, largely negative.
If you are interested in this approach, It is worth reading this Wikipedia article for a less emotional (hysterical?) article on the topic.
From the Wikipedia article:
High-frequency trading (HFT) is the use of sophisticated technological tools to trade securities like stocks or options, and is typically characterized by several distinguishing features:
- It is highly quantitative, employing computerized algorithms to analyze incoming market data and implement proprietary trading strategies;
- An investment position is held only for very brief periods of time - from seconds to hours - and rapidly trades into and out of those positions, sometimes thousands or tens of thousands of times a day;
- At the end of a trading day there is no net investment position;
- It is mostly employed by proprietary firms or on proprietary trading desks in larger, diversified firms;
- It is very sensitive to the processing speed of markets and of their own access to the market;
- Many high-frequency traders provide liquidity and price discovery to the markets through market-making and arbitrage trading; high-frequency traders also take liquidity to manage risk or lock in profits.
In online games; there is a slightly simpler approach because the games (claim to) 'protect' you from some automation.
- Find a product that you know is bought and sold regularly
- Your chosen product should have a buy/sell difference greater than your market costs (buy brokerage, sell brokerage, sales tax)
- Reduce your costs by learning accounting and grinding both faction and corporation standing.
- Place your bid orders so you get the product.
- When your buys are fulfilled, set a sell price so it sells quickly. A low time to sell is as (or more) important as a high sale price.