You lose when you divest at +1000 and the profits go to +5000 and never come back. Or invest at -1000 and profits drop to -5000 and don't come back. But if they keep going past both your trigger points (-1000 and +1000, say) then you win, and the committed investors lose.
This is like betting on a trading range of a stock. If it were that easy it would be easy to get rich.
There's all kinds of reasons this can go wrong. For instance you get back in at -1000, only to see it drop to -5000, then you see what looks like a trading range between -6000 and -3000 and start to play that. You eat your loss and start trading that range again, yet as you divest at -3000, it instead goes back up to say 1000 and stays there for days.... eventually you decide to step in again at 1000 forfeiting the gains that would have compensated your earlier loss. Etc, etc...
These strategies only look easy while they work... but it's just luck.