In order to find a stock which meets my EP criteria, I have this checklist criteria, MAGNA 53 plus CAP 10 by 10. You have to understand what kind of stories are working in the market. Currently, anything related to AI is a story which works very well. High price stocks is what I have moved my momentum bus trading to because I find high price stocks have more smoother moves.
If I have to give one advice to anybody who is starting out, focus on stocks which are capitalization below 10 billion. So that is as far as EP is concerned, which is trying to move your account in a larger increments. These trades can move your account in 10%, 15, 20% increments in one trade, sometimes 50, 100%, right? Depending on how much you're risking on those ideas. When you see Root, after making such a big move, its capitalization is 620 million.
So if you look at when this catalyst came in on a Root, the day the catalyst came in on a Root, the day before that, its capitalization was less than 126 million so if a stock has 126 million can he make can i can it double triple yes if you want to become a profitable trader have self-leadership because this is a game of self leadership you have to be really motivated to do this this is not for everybody unless you have self-leadership you'll not make it in this business all right welcome back everybody it's my pleasure to introduce our next guest, Pradeep Bande, the founder of Stockbee. He is known for his focus on process, codifying, the momentum burst, and episodic pivot setups. And it's a real pleasure to have him as a part of the conference and for sharing his thoughts and ideas on swing trading. Pradeep, thank you so much for your time and looking forward to this.
Oh, thanks. Thanks for having me. Of course.
Let's go ahead and dive right in. I'm sure you've got a lot to cover. I'm very much looking forward to it. And at the very end, we'll do a... you know a q a on the concepts and uh let's dive right in okay so let's like and start by going into my slides i'll just share the screen so essentially there are two types of setups which i trade and that's the crux of everything which i do one is catalyst space anything which is this is catalyst based or where there's a clearly identifiable catalyst and based on that catalyst the stock is likely to make a big move.
Now that is basically one type of trading which I do which is for finding trades which will move my account in larger increments of 20 percent, 30 percent, 40, 50, sometimes if I'm lucky 100 percent in one trade. But there is another method which I trade and which is momentum worst and in momentum worst what I am essentially looking for is these trades which are smaller in duration or they are not shorter duration trade. They don't move your account in big increment, they move your account in 1%, 2%, 3%, 4%, 5% if you're lucky, increments, but you can find hundreds of these trades in a year. So this is broadly the two ideas behind my trading.
And so let's look at the catalyst-based kind of a trading, which is what like I do. And most of the people who know about my trading or StockBee, they heard about episodic pivot. So episodic pivots is one of the kind of setups which is based on a catalyst.
So the only reason I'm going to get into a stock is because there's a catalyst. And if that catalyst is going to make the stock move, then I want to be in that stock. But these kind of trades based on catalyst, episodic pivot, which are going to move your account in big increments, they are basically rare. They don't happen as often as you would like them to happen.
Plus, the market has changed as a result of market change. A lot of time when there is a catalyst, the stocks tends to gap up a lot and the first day move tends to be very big. And after that, most of the time they don't do much or they just go sideways and then they will have a reaction afterward. So to profit from that kind of a phenomena which is happening in the market, I also have a setup which is just a subset of the episodic pivot.
which is stocks in play, which is essentially a trade which is just a day trade kind of a thing, because on the day of the earnings or day of the catalyst, stock will sometime make 30, 40, 50% move, and then nothing happens. So I know that. So I play them at just one day thing, which is stocks in play.
Now, because stocks are reacting very violently to catalyst, because more people are trading episodic pivot. Most of the time what you see is the risk is higher getting onto an EP on the day of an EP. So I created this setup which is more a delayed reaction EP and in a delayed reaction EP what I look for is I look for a stock which had catalyst but I don't necessarily enter on the day of the catalyst because that day you might get shaken out or it's not necessarily the best entry which I get or it is gapping it too much.
So I wait for it to set up nicely and then when I get a low risk entry is when I enter that particular trade and so that's a delayed reaction EP and especially delayed reaction EPs work very well on the short side. because on the short side whenever there's a negative catalyst the stock gaps down and then it tends to like in a gap reverse during the day and for three four days there is this tendency in the market all bad news has been priced in the stock goes up but after three four days it starts going down so i do the delayed reaction similarly delayed reaction i do it also on stocks on the bullish side now these are all uh these are all setups which are really a variation of the original idea of EP, which I've been trading. But in recent years, when I look at the EP, I see that there are not enough EPs, there is not enough money.
Because if a stock gaps of 40, 50% on the day of the earning itself, then incrementally, it makes only 20% move. So there's not much of a money in this. So I created a set of idea, which has become my main set of idea now, which happens more frequently.
It has much more profit potential than the original EP and that is the 9 million EP, which is essentially to look for a trade in a stock which suddenly has a volume surge and the volume surge is more than 9 million basically. So it's basically a high volume breakout, basically very high volume, extremely high volume breakout, which is not something which is a norm for that stock. So that's become my mainstay in terms of what I do.
if you're doing the classical EP, you'll be lucky if you can find 5 to 10 trades in a year. But when you do 9 million EP, you can find 100 trades, you can find 200 trades, because it increases the universe to a large extent. So this is sugar babies, obviously, like the word might sound very strange to people. But when I did this 9 million EPs, what I found is that there are certain stocks on which there is a continuous number of 9 million EPs which keep happening. And those stocks, when they make moves, whenever there's a 9 million EP, they make these big moves.
They make just a swing moves of 40, 50% in a couple of days. So I found a way of isolating stocks based on this 9 million EP, how many times it happens in a year. And I trade those stocks as a core list of stocks, which we call it sugar babies, because this is something which you can like in a go. and find 40-50% swing in just three to five days on these kind of stocks.
So those are the other variations of EP. So essentially to summarize this like and I started originally with an idea of episodic pivot some 22 years ago. And that was my main idea.
Today, the original classical EP is a very small part of what I do. Most of my money is now comes from 9 million EP or sugar babies, which is more mainstay kind of a method, which is more based on the same idea of moving your account in larger increments, but using a different way of identifying stocks, which are going to make a big move. Now, whenever you look at episodic pivot, when I started trading episodic pivot in the beginning, I was only trading episodic pivot, which are based on a real catalyst.
So I was looking for real earnings, I was looking for real sales or looking for a real something which is like say a recent example CRDO. If you go and look at CRDO what you're going to find is there is a reason why the stock went up right and basically if you see CRDO here right here this is what like was this earnings and sales let me pull this in here and if you see So it had 275% earnings growth, 89% sales growth, and this is what it projected. So there, I know why CRDO was likely to go up on this day, and there is a real catalyst, right? But there are so many stocks which make moves, and they are no real catalyst. It is just a story, right?
A good example of that is a stock which I bought yesterday. ACHR right now this stock it's a story that they are going to have a planes which will fly vertically take off there is no real business right and if you look at their earnings or sales it's just hot air right and this is like an award in Wall Street terms is called fugazi, right? And there is just like, there is 0% sale.
There is no sales, but these stocks can double, triple. They can make bigger move than CRDO. They can make bigger moves than stocks, which are earnings. From time to time, the stocks make these big moves, right? And it makes 100%, 200% moves.
So the realization that stories make bigger moves. then the real catalyst is really the turning point also. So nowadays, I trade a lot of story stocks as EPs. Anything which is a story is likely to fly better than a stock which is a real catalyst. So I focus more on these stories, which can be just like, you just have to keep your logical brain aside to trade these kinds of story stocks.
So that's the other twist, which is like new twist to EP. So story EPs has become like a very important. The only difference is on a real catalyst kind of an EP, if I have a conviction, I'm willing to put a lot more capital, I'm willing to go 50, 60, 70, 80, 100% of my account on.
But on a storage stocks, I can't bring myself to put all my account on the storage stock. But even if you put 20, 25%, those storage stocks can go up 300, 400% or at times even crazy. So storage is another twist to the original idea of episodic pivot. So let's look at some of the examples of this EP kind of a trade. The recent example is like an SCR deal.
It's just what I just now talked about, where there is a real clear catalyst. And based on the catalyst, the stock is going up, right? Before I go ahead, like, and if you have any questions, you can ask, because I covered a lot of things in this first few minutes. So if you have any questions, you can go ahead.
Yeah, just for people who maybe aren't familiar. with an episodic pivot, could you kind of give a brief definition and maybe use one of the examples to kind of walk through what exactly you mean by an episodic pivot? So episodic pivot is a terminology which is more used in television or in movie industry.
Basically, the story takes a twist, right? There is some catalyst which comes in, and as a result of the catalyst, the market completely re-evaluates its view about this stock. Supermicro was going nowhere, six months going nowhere, and then it guides higher, and it guides significantly higher, and the story took a turn. That's the episodic pivot. As a result of this, the stock went up 154% in less than a month.
Now that's the kind of thing which is a catalyst which changes the story or it changes the market view about the stock, and because of that particular episode, the stock goes... in a different direction basically and i can show you similarly on a short side like an smci is an example of long side but mobile eye right mobile eye came and like guided significantly down when it significantly guided down uh after that it went down like at 20 30 percent right basically or here is a good example of a episodic pivot right door opens in a flight Right. That's like another story took a total turn and the stock went down after that. So that's what episodic pivot is. It's some surprising news which the market has not anticipated.
And that surprise leads to a stock making a big move. Yeah, perfect. I think that's good for now.
If you want to run through examples, I'll probably have some more questions to jump in there. OK, so Sierra Deo is a recent example of this thing. And as I showed you just now, Sierra Deo.
If you look at it on the day of earnings, even before the market opened, this was very clear that it had significant from negative sales growth, 275%, 89%. And I pay a lot more attention to sales growth rather than earnings because earnings in today's market conditions are not necessary for a stock to make move. But what you want to see is sales growth.
Sales growth is what drives stocks moves. So sales growth was phenomenal. Not only that, it was projecting for next four quarters, this kind of sales growth and this kind of profitability. So this is a good example. And as a result, you can see that the stock made a big move, right?
And this is an example of an EP where there was a real identifiable catalyst. And as a result, on the day of the earning itself, it went up 27%. And since then it has gone up around 40%, right? So that's one. The other one, recent one, which is ASPN, right, here on this particular day.
So if you see in this particular case also of ASPN, you're going to see that there was a real catalyst. right so you can see that 92 percent 107 percent so there's a sudden jump in sales and it is guiding higher for next two quarters at least 110 57 percent uh properties also so the aspen as a result of this particular thing had this gap and on the gap and this is what happens to a lot of bps nowadays on the day of this catalyst the stock made 56 move so a lot of the catalyst gets priced in in just day one and if you see since then the stock hasn't really done much yes it is up 30 but most of the catalyst got exhausted on the first day itself basically it's up 57 and it ended up giving up some of the gains in last two days so that's another example recent example of like this thing obviously smci was something which was a big catalyst smci had two things it had the earnings or it guided significantly higher and then after a couple of days there was earnings but it also had a story element to it and the story you have to understand what kind of stories are working in the market currently anything related to ai is a story which works very well so it had both components it had a real catalyst plus it had ai which is a story kind of a thing and as a result of this this stock made such a phenomenal remove There is this thing, app, if you look at APP, Applovian, right, and earnings. And since earnings, it has made like around 40% kind of a move on earnings day itself.
It made around 24% move. Even when you go look at app also, you will see that there's a real catalyst. It's like it basically has back-to-back quarters of 36%, 48%, 44%.
Any growth, sales growth, about 39% to me. If it is happening back to back two quarters in a row, the stock is likely to make a move because that kind of a sales growth is rewarded by the market. If you study the big winners, which go on to make big moves, they will typically have sales growth of 39% plus quarter after quarter after quarter.
So when I see something like this, and a four digit earnings growth, and if the stock hasn't rallied, then I'm excited. And the stock didn't make a move after that. Again, those are earnings here. So there is like an AR it guided, it guided higher, actually it guided higher.
And then the actual earnings was here basically. So that's one which was there. Then you had like an basically when you have a very neglected stock and we suddenly come out with earnings here in this case of Powell Industries. For a long period of time, it was not doing anything. This price wasn't doing much.
And then it had a catalyst and the catalyst was basically again earnings. sales right here you see 53 percent and it guided 49 percent for next quarter so 999 53 percent sudden jump in sales so sudden jump in sales and as you can see the stock made a big move 50 56 percent so that was another one there are two types of episodic pivot when you're looking at real catalyst right one kind of a thing is where you have a growth kind of a company like CRDO is an example of a growth kind of a company. It has some product which is relevant to the AI industry. So that is why it is in a growth kind of a category or ASPN also is in a growth kind of a category or SMCI is a classical growth kind of a thing.
But there is also another type of an EP which works very well and which is a turnaround. So in a turnaround kind of a situation, when a stock for multiple quarters or multiple years in a row. is not making good profit, it has trouble with its business, its sales are going down, and then suddenly it comes out with sales and earnings growth which surprises the market, then this is a turnaround. And you will see that turnaround EPs often make bigger moves than EPs on stocks which are real earnings and real sales. And the reason being that when a stock has this kind of two or three years of negative sales growth it gets beaten down to a very low price level it is like and i really beaten down the market has a very negative opinion on it the market doesn't really care about this stock analysts drop their coverage and when it manages to turn around that can be a big move and our company and fitch anf is a good example of this kind of a turnaround see here this is where first I noticed this stock and multiple times I've traded this stock and the stock from this first EP has continued to go up and it has made around 522% move and if you see the reason it's very apparent.
It was a classic turnaround kind of a situation. See, for multiple years, sales were growing down. Then a management change happened. New management came in and they started this particular sales growth started. And when the sales growth started, you see that the stock just took off 467 percent, 16 percent.
This is where like this is where they also had a $6.28. So as a result of this particular thing, this stock. has so this is an example of a turnaround kind of a situation recent stock which has a similar kind of a catalyst with gps but hasn't done much so i'm keeping an eye on this because i wrote down this is a turnaround ep because if you see again the numbers behind the scene on gap and again there is a new management in gap yeah it's 903 but it's not really guiding higher it's not same as abercumb and fetch So that's not something which may make the same kind of a move, but there is a potential for a turnaround kind of a situation.
So that's the second kind of an EP. Just jumping to the question, would ELF also be in the kind of same vein, a turnaround? ELF is more a growth.
It's a new company. It's a new growth, right? And it's created this category.
Since this particular day, I've been monitoring ELF like multiple times I have gotten out of this trade. And ELF is more a sales growth kind of a story as against a turnaround. Because if you see ELF, it's been growing sales at 49, 78, 76, 76, 85, 71% for six, seven quarters in a row.
So that's like a growth kind of a stock, basically. So anything which is growth, any stock which has 39% sales growth, I am... I consider that as an EP if it is meaningful, like the sales growth on 1 million becoming 2 million is not meaningful, but if it is 10 million and it grows by 39 million or 100 million and grows by 39%, that's something which is going to make the stock fly basically.
So ELF is a growth stock. Turnaround stocks, like basically if you want to look at an example from past, this is a good example of looking from past, Avis Rent-A-Car. And if you go and see during this time period, its earnings shot up a lot during 2020 after being lower.
So that's a classic example of a turnaround kind of a thing. Or if you look at this, right, so you see like any from a loss of $6.20, it had a jump of profit of 58, which is like a huge jump. And as a result, you'll see the stock from being trading at around $8, it went all the way to $250 or $300, I think to $400, right? So that's a turnaround kind of a situation. So those are the kind of situation, two types of situation I look for, which is one is a growth.
And in a growth kind of a situation, I will look for sales growth of 39% plus. And if it is two quarters in a row, that's good. And the other one is turnaround. And when it comes to storage. Anything I will buy because it is a story.
Now here again, some categories are not going to have that kind of a sales growth. Sweet green is an example where there was an EP here where it surprised the market. And then this is a delayed reaction.
I actually bought it on this day instead of buying it on the first day, basically. So that's like basically Powell move. Western digital. Again, if you look at Western Digital Corporation, you'll see.
It's very apparent when you look at the numbers, the numbers stand out when you have these kind of numbers, right? And it's very clear. This is also a turnaround kind of a situation also because negative sales growth, negative profitability, and suddenly it surprises the market. And as a result, here, like you see, I write down this, if I find something like this, so that I can remember, and it made a move after that. So there are like in a bunch of these examples, there can be real catalyst in the case of HIMSS.
There's a real catalyst, which is they're going to come out with Ozempic, which is $200. Ozempic, right? And that's a real catalyst. So as a result, the stock is up 60-70% from this.
Obviously, you have Innsmade, which is a recent stock, which made a move on a catalyst. And you can see that it has a cat. Real earnings, real sales, right?
And basically, so it's just had a turnaround kind of a little bit of a thing and a biotechnology kind of a thing. So that was a real catalyst. In a biotechnology, you can have a real catalyst.
Now that's... Basically, the kind of thing where you can actually see the numbers, the numbers stand out, the numbers speak to you. And then you can with conviction say, OK, this is likely to go up 30, 40 percent. Can I put 50, 60, 70, 80 percent of my account with the risk management? Yes.
And then make money. All right. Unfortunately, the last example which I'm going to show and which is what people want to find every day. But this kind of a thing is going to happen only once in a lifetime. It happens very rarely, right?
It's a unicorn. You can't base your strategy based on unicorn. Yeah, Root had like a really phenomenal number suddenly. But in a year, you're going to only find one or two examples like that.
So it's not really like, see here, 56, 173, 284. And that's what started this move. But that kind of a thing. doesn't happen all the time that's the problem right if it happened every day we'll all be billionaires but that doesn't happen so as a result of this i like to go into the story stocks right so that is as far as real catalyst is concerned so two types of catalyst i look for one there is a sudden growth in a stock or the market discovers that particular stocks as a growth stock or a turnaround typically turnaround make longer last lasting moves than growth stocks, because most of the time growth stocks can make a move for one quarter or two quarters and they can flame out.
While in a turnaround, if it's a real turnaround, that turnaround can last for quarters, months, years. In Abercrombie Fitch, for example, that turnaround is a genuine turnaround. So the stock continues to keep going up. So that's as far as the real catalyst EPs are. Okay.
Any questions here? Yeah. So you mentioned a few kind of criteria that you've looked for when you went through those different names. Neglect was a big one.
Would you mind kind of summarizing some key things that you look for that maybe, you know, if it's apparent in episodic pivot, it brings it from a B minus setup to an A plus setup for you? Okay. I'm going to keep this slide as it is.
I'm just going to add content on this so that it is easy. So in order to find a stock. which meets my ep criteria i have this checklist criteria magna 53 plus cap 10 by 10. so each of these letters stands for some criteria checklist so magna 53 so ma stands for massive acceleration i want to see a massive acceleration triple digit something which is growing at like 10 suddenly growing at 100 200 300 percent or so massive acceleration either in sales or in profit or Analysts were expecting 10 cents and the company come out with 50 cents, right? So that's a massive beat on analyst expectation.
The next thing is gap up. If this news is a surprise to the market, the market, the stock should gap up, right? And a lot of time people think that this earning is good, but the stock doesn't react. The stock just sits there or it actually like in a pre-market doesn't react.
So that's not what I'm looking for. So the gap up is important. The next thing is neglect. So I look for a stock which is neglected in terms of two months, six months, one year, two year, three year, the bigger the neglect, better it is basically, right? And neglect is not only in terms of a price action, neglect in terms of number of mutual funds owning the stock.
You will see that some of the stocks, they will have less than 100 mutual funds owning them when they are discovered by the market. So that's a neglect, right? Or there is no analyst covering that particular stock, or there is no news flow on that stock. When you go to some... news site like the fly or briefing you don't see for months there is no news so that's a neglected stock and then suddenly the market discovers and it goes up like crazy root is a classic example of what happened like that right a stands for acceleration in sales so if there is a massive profit the company has made company can make massive profit by just reducing cost getting rid of employees right that's not really going to fly because it's just one time cost cutting which is there so i want to see if there is a massive acceleration in profit i want to see if there is an acceleration in sales so a stands for that acceleration in sales the 53 part the phi stands for short interest so the stock should have a short interest of five days or more so if it has a short interest of five days or more that acts as a fuel and because the market is considering it as a negative story or there is like any no the market consider uh the market has a negative opinion on it okay so that's one now if it is a stock which is well known by a like and it is something which is like a stock which is covered by analyst and all I look for whether the analyst, the three is three plus analyst raising their price target.
Because if there is a substantially new news which comes in in the market, the analyst go and increase their price target. This is what happened on the day on which SMCI came out with this news saying, look, they're going to like beat by significant 10 or 12 analyst raise their price target for SMCI. three plus analyst if they raise the price target then it tells me that this is something where the analysts think uh this is significant right because analysts raise their price target if there is a new information for them to raise price target so that's 53. now this is out of this this is the magna part is must have means that's the must have part 53 is optional uh and then if you want to find something which is going to make more explosive move Then these cap 10 by 10 criteria are very important. And the cap 10 by 10 is the capitalization below 10 billion.
The stocks which are capitalization below 10 billion are the one which are capable of making big moves, right? And when you look at CRDO, right, CRDO's capitalization is like basically 4.3 billion. So this kind of a stock can double, triple, right? Or like in a root, when you see root, right, after making such a big move.
Its capitalization is 620 million. So if you look at when this catalyst came in on a route, the day the catalyst came in on a route, the day before that, its capitalization was just like and basically less than 126 million. So if a stock has 126 million, can it double, triple?
Yes. If a stock has like 100 billion as a capitalization, like say when I look at Moo, even if it has a catalyst, I do not believe move is going to double or triple. It is going to make 10 or 20% move. So that's capitalization. And then the 10 stands for IPO of less than 10 years.
Most of the big moves in a stock happens in the first 10 years of their IPO. There are rare examples like NVIDIA or something which will move later in their life. But most of the time, like when you look at a stock which has Z scale, right?
Zscal has made a big move after its IPO. It's made this big move, just like in less than four or five years or seven years ago. That's why in the first five years it made those big moves. So that's my criteria for selecting a stock.
So that's the criteria. And if the stock meets that criteria, then I consider it as a real catalyst. Great. And do you have certain routines that you do every day and every week to keep track of new EPs that...
are coming to market whether that's you know looking at news um screening you know pre-market what do you kind of do to make sure that you're on top of any potential opportunity so in order to find this ep all the work here to do it in pre-market or in post-market so for that we have a process which we follow which we call it ntrt mtrt which is night time is right time morning time is right time so it's a checklist where every stock which had every stock which had like an ep kind of a characteristic if a stock had 39 sales growth right i want to know i go through like an a i have certain sites like i use the sites like the briefing.com right so briefing now today is a holiday so you don't see the thing but like so if i go on a regular day you're going to see it will show earnings right So I go through this to look for anything which is growing earnings or sales. Then I look for like any things. So briefings is one of the sites which I use. Then in briefings also, you'll see that they have this, this is my number one source of information for most of the earnings related thing.
So they have this kind of a market summary or they have these stickers where they tell you what is happening for the day, which stocks are up based on earnings sales. So I will go through everything in the morning by the time before the market opens by 8 o'clock, 8.30, I would have looked at every stock, like say Asan is an example of a stock which was up, there was a catalyst there. So I look at this site to find information, then I have some other sources like the fly. And then I have my own software, which looks at how many analysts have raised their price target.
So that's another thing which I look for. And as a result of this process, any stock which is meeting my criteria i will know about it before the market opens so if it meets my criteria of magna 53 cap 10 by 10 i'm going to buy it at open basically right so this is a process it is a process and the checklist is there for this particular process there is a checklist and if a stock meets and then i'm going to go and look at it and it's the same process also i use for finding stories so here is a stock which i bought yesterday and it doesn't meet my criteria of like magna 53 cap 10 and 10 but i know this is a story right There are going to be planes which are going to fly vertically. People will be able to go from one place to another in 10 minutes. You'll have a helicopter landing in your backyard. Science fiction, right?
Sounds very interesting. And the stock is up like 17% based on that story. And a couple of times the stock has made 50, 100%. So I know this stock. I know there is other stock like this.
So here is another one. This company from time to time makes these big moves. It's a story, right?
And they have a solid state, high density battery, which in our lifetime, sometime in our lifetime, it might come in. But from time to time, they come out with press release saying they got an order, something happened, and the stock makes 40, 50%. So that's the story. Again, the story kind of a thing, I find through my process of NTRT, MTRT.
So that's the process for finding the stocks. Yeah, great. And once a name is on your radar, and you're either going to, you're looking to enter it.
What's kind of your process for doing so? I know you like to enter right at the open. How do you manage risk right off the open? Yeah, what's your process for actually entering the names once you've identified them as EPs? So when I look at the catalyst and when I look at the strength of the catalyst, if I think that this stock is going to make a 50%, 100%, 200% move, then in that case, I would...
willing to take a 10% stop on that kind of a situation, because I know this is a life-changing kind of situation. It's going to make like multiples of my risk. Otherwise, typically, I enter at open, right, with a 2.5% stop. And sometimes I get stopped out and the stock makes a move. And if I believe in the catalyst, then I'll get back into it.
So it really boils down to if I have a genuine catalyst, and if I believe in that catalyst, I'm going to go into that stock at the open or I just wait for a few minutes to see how the market reacts because a lot of times there are checkouts and then I will enter. Sometimes, a good example of that is, again yesterday itself, I looked at this stock, SRPT, right? I looked at the catalyst, I looked at everything, but based on my past experience of SRPT, I had studied this stock previously, I had seen its earning, I had this thing that... It didn't react positively to earnings, so I had this thing saying, okay, this catalyst is good, but I'm not sure whether the stock is really going to react positively. So I decided that I'm going to wait for a delayed reaction EP on this particular stock, right?
So I am going to wait for a delayed reaction, so I didn't enter this particular stock. Even if I had entered, I would have got stopped out probably, because the stock went up and it faded, right? So then I'll wait for a delayed reaction. So I decide, based on the strength of the catalyst, There are situations which are must buy.
SMCI, when I saw the catalyst, I knew this is to be must buy, I just bought it. But SRPT, when I looked at the catalyst, I wasn't convinced that this is going to fly immediately. I thought like I'm better off waiting because it was gapping up too much also. So I said, okay, let me see, right? So two or three variations, tactical variations, either I buy it as an OPG order, which is opening price guarantee, or I wait a few minutes and buy it.
Or I decide to do it as a delayed reaction EP. Could you walk through maybe a delayed reaction EP that you bought and kind of why you waited for that point to enter the name? Sometimes like and it just is like so here like this is Hymns, right? Anyway, I was traveling on this day, but like the catalyst was genuine catalyst, right?
So I said, OK, this catalyst is good. Really, this is like an... So I waited.
And then when it had a breakout is when I bought it because that was the first positive day after that particular thing, right? And now sometimes what happens is this BA, when I heard the news of door opening in flight, I have some background. I worked for a cargo airline many years ago. So I said like, no way, this stock is going to go down, right?
I shot at big position and I got stuffed out on the first day. But I said like, this is a genuine catalyst, right? So I waited and on this day I shot it again with size. So it's like once I study a catalyst and once I'm convinced about the catalyst, I just want to be in that particular stock to profit from it basically.
And if you delay the entry, it doesn't work. Mobileye, when I looked at what they are guiding down that day, I said like this stock is going to go down. But I know there are people because it was gapping down 40%, there will be a short term trade.
So I waited and then I shorted it on this particular day. So delayed reaction EP is more and more what I'm doing. Also, when I started doing this, I was trading a six digit account. Now I trade significantly more capital.
So it's not the same thing I can do go on 100 million. capitalization stock and put all my accounts. So I had to wait for delayed reaction or try and get a better entry.
And I tend to trade more established stocks on EPs also nowadays as against these very small stocks. So that also drives the decision to get into delayed reaction. And what's your process for scaling out and selling a position once you're in it? Does it depend on the catalyst?
Does it depend on... you know, which variation on the EP setup that you're using? Yeah.
So whenever I do, whenever before I take the trade, right. And I calculate in my mind, based on my experience and the catalyst strength of catalyst and all, how much the stock is likely to make a move. Right. So when I looked at Aspen that day and looked at the catalyst, I said, this stock is likely to make 40 to 50% move based on the catalyst.
Right. Now, unfortunately the stock gaps up. 27 percent so what is the additional 20 to 30 percent additional i thought is possible right basically so i bought it i had a profit and i put my stop to protect the profit and i got shaken out on this particular thing i didn't re-enter but incrementally it didn't really make big move after that like so i am like happy but my calculation was this is going to make a big move smci i thought like based on that particular thing it's going to make 80 to 70 to 80 percent move i didn't think it will make that kind of a big move of 200 kind of a thing but i was happy getting 80 to 90 percent so always look at what is likely to be the profit on this particular trade on the gps i think an it is likely to make another 10 or 20 20 kind of a thing it's not going to make double or triple right and so uh so accordingly i will decide my profit target and I will decide where to get out. I will give it a room to run.
If I'm genuinely convinced that this is going to go up 60, 70%, I'm not in a hurry to get out on that particular stock. But once it reaches that kind of a target, I don't want to overstay the party. In this CRDO case, I thought it will make a 40% kind of a move.
And it made that move and started reversing. So I got out for a profit, basically. So I always, before...
doing this before getting into anything i always have a profit in mind and if that is what it does and if it doesn't do that and if it just hesitates after the entry i will kill the trade because i have seen the one which work they just go like bullet if they keep coming back they don't work and what in your experience and this might have changed over the years for sure but what in your experience in a good market um are kind of the success rates of episodic pivots or different variations that you trade the classic ep in a very good market if the market really has like an uh 12 to 14 months of bear market and everything is beaten down and it comes you are going to get 10 to 12 eps and then you can like because everything which like if you enter right you can get like 70 80 win rate but like you are lucky if you can get three to four ideas in a market like today the genuine eps right so i'm no more like in a really uh means i will always buy ep if it shows up but what really my focus nowadays is delayed reaction ep and 9 million ep so where my risk is very low because in a delayed reaction i'm sitting there waiting for a good buy point to come in and if the good buy points come in then so here decker's i was waiting for a good buy point and then i waited and entered it didn't really make a big move i'm waiting for this stock to set up again uh because i think the earnings is good here the earnings was good for the kind of stock it is like it's not going to be phenomenal right and so so delayed reaction i waited and made sometimes uh like i thought like this thing is going to make a move gps i had a big position second day it started rolling over i got out And I'm now waiting. So 9 million EP is where most of my focus is nowadays and delayed reaction EP. And 9 million EP is when 9 million shares are traded on that day?
Yeah. Suddenly, it's like it is not trading that kind of a volume and suddenly it trades that kind of a volume, right? And so it can be like most of the time, this will be some sort of a story stock, right? And it's here is a classic example of like in a trade, which I did during the COVID-19 time on.
ep 9 million kind of a thing and i didn't even understand why it was making that kind of a move but like and it was making that kind of a move and the only reason i got into this particular stock was it showed up on that day in a ep 9 million thing right and it just said like look hey we are going to have like a space flight we are going to colonize mars and all yeah right but like 9 million kind of like an not here like an it's where is that 18 or 90 million it traded one day when from decided to announce uh here right uh you see like on this particular day it traded a lot of volume right and basically so as a result the stock went up like any for a couple of days again same kind of a catalyst jeff bezos goes into space and it trades like 50 60 million shares So it just went up, right? So recently if you see GME right here, it showed up in 9 million breakout. It showed up in 9 million breakout here, right?
You know, it's a story stock, right? And there is nothing there but just story. So if it shows up in 9 million, I'm going to buy. And there are certain stocks which tend to make a lot of 9 million EPE in a year. Mara.
is an example this is what i called a sugar baby kind of a thing this stock if you look at it right i calculate how many nine million eps the stock makes in two years one year six months kind of a thing so if you see mara has made 98 9 million plus breakouts of 4 plus in last two years for whatever reason this stock when it makes a move like that it swings of just three to five days are like 40 50 percent so every time mara has that kind of a setup and it is making that kind of a move. I mean, I just buy if there's a 9 million breakout and if it is at the start of a swing. Each of these swings are like big, huge swings. So those are the stocks where like Carvana, it's a story stock, right? Doesn't have like any reason why it goes up, but it just has 9 million.
It makes 36% in few days. So these are the stocks, coin, a firm. So they make big moves. So that is what I do on 9 million EPM. That's my main focus nowadays for finding like bigger moves obviously.
So these are like basically some of the things on the EP which is basically a line extension or like saying look and you had a coke now you have orange coke you have a green coke you have a vanilla coke so just the same idea of episodic pivot but extra wanted to get a lot more setups. 9 million EP gives you anywhere between 100 to 300 trades in a year. classical ep gives you only two to three trades so that's why i like it so that's as far as this is concerned and you can see some nine million eps like iron which is a recent example right so here nine million ep and it makes a move of 54 percent in less than a week nine million ep and it makes a move of 48 percent i don't even know what it does i don't care but it shows up in nine million i'll buy i don't know what it does but i'm just saying right Yeah, so same way CLSK or like the Drop King, which I bought a couple of days ago, even though there is a genuine interest, like, yeah, it's a 9 million EP. It's going to make a move, right? So because it has multiple times made those kind of moves based on that kind of thing.
So that is as far as... EP is concerned which is trying to move your account in a larger increments. These trades can move your account in 10%, 15, 20% increments in one trade sometimes 50, 100% right depending on how much you are risking on those ideas. But there is another thing which I trade and I trade these singles what I call this is like home run strategy and this I call it as a single strategy which is a momentum burst. In the case of momentum worst, I'm buying a breakout or I'm anticipating a stock which is likely to breakout and buying.
These are typically trades of 3 to 5 days, 8 to 20% in terms of profit on a trade or $10 to $300. on a swing. Now again here again when I started trading these things I used to trade any and every stock. Nowadays my focus is more on high price stock.
So for breakouts I focus exclusively on high price stocks most of the time. I don't really care about 8 to 20 percent. I care about if I'm risking 10 dollars can I get 30, 40, 50, 100 dollars. So that's what I focus on. And the other thing is If you want to trade these breakouts or anticipation setup, the best returns I've seen are either on biotechs and technology stocks.
So if you just reduce your focus to just biotech and technology stocks, then you can make a lot of money. And if you have to trade this kind of a method, this kind of methods work very well when the market is going up or the market is favoring them. So you need a situational awareness filter.
You can't be just trading them every day because there are time periods when you're going to get chopped to death. Every single breakout you buy is going to fail. and there are times every single breakout you buy is going to work so you have to figure out when your breakouts are going to work and not going to work so every day morning i create situational awareness i answer one question are breakout likely to work if breakouts are likely to work then i go by accuracy if they are not likely to work i sit out okay so and these are some of the examples these are very simple trades basically like i'm just looking for some sort of a range expansion so this is a stock which I bought on this particular day right because it was up like an 11 dollar and this is a stock which I traded like in the last five years or six years I must have traded these stocks for every swing I trade because it's a very nice smooth moving stocks on both long and short side so I risked 10 dollars on this particular stock and this is what it did in four or five days it made 73 dollars on that particular thing right There's a stock which is a sister stock of this because I saw O'Reilly and I was in O'Reilly. I was keeping an eye on this one, AutoZone, and I saw AutoZone breaking out. So this day I bought it when it was up around $30 and I put $30 as a stop and just three, four days.
It's up around $160, $150. So those kind of trades in high price stocks are very common. Chipotle Mexican Grill, which is one of my favorite stock. I am very sad that it is splitting.
because that party is over my money making idea in chipotle mexican grill was every time it had a breakout to buy and just keep buying a smaller because many time it breaks out and the breakout day is just like half a percent or one percent it is breaking out with two percent and it makes a move of eleven percent right so high price stocks is my thing for these kind of stocks uh decker right anything which is priced above hundred dollars especially nowadays $300 I'm always going to look for some sort of a like breakout so here it's up like with one percent in four days you raise $10 you made $45 so high price stocks is what I have moved my momentum bust trading to because I find high price stocks have more smoother moves they are more like the retail traders don't want to get into high price stocks so I can do a smaller size but it still makes good money or I'll go into biotech or technology. Again, in this particular situation, we want to make money using breakouts. The most important criteria which I found is capitalization. Capitalization below a billion, if you focus on, there are a lot of breakouts, especially if you're doing the smaller price or biotech technology. And the other thing is three sectors, make the big, three sectors is where best follow-through happens.
Biotechnology, technology, and consumer discretionary. so that's what and then i anticipate some of these breakouts i anticipate so if i anticipate then i get into this but this high price stocks is like really my bread and butter in terms of this kind of moves all day i can trade moves like this 2.54 i put a stop at half of the day's range and it goes up 31 percent into three or four days so that's and i straight them both long and short but more on the long side than short side uh that in the sense is the totality of what i do i do anticipate some of these things so if a stock is setting up nicely i would be like in looking at so these are the stocks which i am monitoring for say now cimera neo jl which are setting up i would be in them this already had a breakout but like dig sporting good now this is the kind of high price stock which i like to trade basically so with that over to you in terms of whatever questions you want to ask yeah for momentum burst could you also go through your two lynch criteria which is yeah good good question uh let me like an do this okay so let's see now for selecting a stock i'm going to use a two lynch criteria right and basically in the case of like uh breakout right and if there is a breakout let's like let's go to a example of this it's a good example which is like chipotle mexican grill which i traded some multiple times but this particular example i'm going to take you too because that is a good example of that kind of thinking right and so so here like and if you see the stock had this first leg move and then it had this breakout so this is what we call that two lynch so for two lynch what i look for is the stock should not be up two days in a row right it should be linear i like to trade stocks which are very smooth which are linear trends i don't like to trade stocks which are all the time jumping all over the place. Right, and you have some stocks which just like Chipotle Mexican Grill moves very linearly whenever it moves.
AutoZone moves very linearly. So I like those kind of stocks. I don't like stocks which jump all over the place. Then negative or narrow day prior to breakout day. So the day before the breakout should be either a negative day or a very narrow range day.
you want to buy at the start of a swing move right so that's the thing and close the consolidation quality the consolidation which happens before the breakout should be orderly there should be low volume it should have like a volatility contraction in the direction of the breakout and the last criteria is whenever i'm buying if i'm buying it at 10 o'clock 11 o'clock or at two o'clock the stock should be closing near high so that's the two lynch criteria Now, there are variations of this criteria also. If you have a stock which has basically gone sideways, I like consolidation. This consolidation, I like the consolidation to be less than 10 days because I've seen if the consolidation is less than 10 days, then the breakouts tend to work well.
If the consolidation becomes longer than 10 days, especially if it becomes a one-month, two-month kind of a consolidation, then even though it looks very attractive the stock has a breakout and it fails so i have a criteria for buying those kind of breakouts where we have two lynch plus cv which is it should have a high volume search so it should have a 1.52 times the 50-day moving average volume and it should have a catalyst i have seen if you buy a consolidation breakout without a catalyst it tends to fail so i look for cv which is a catalyst plus volume for these kind of things so that's the thing on momentum boost yeah yeah excellent um i think that's super helpful um one thing i want to ask you and this is more of like uh advice for people watching this when they're studying these apps from themselves they're studying big movers to try to find and build setups um i know you every week you take a look at the the stocks i had the big moves that week could you kind of talk about that process and um you're thinking behind that yeah so in fact i do it daily so every day i look at stocks these are stocks which have gone up 20 plus in last five days right so every day in the morning when i come to my office i look at these stocks which i made 20 plus move and see okay Why have the stock made the move? What was the, see, this is NNE, right? And what is the thing which happens at the beginning of the move?
What really starts moves up 20% plus, right? Because that's my, I want to capture like moves up eight to 20%. So I just study the moves up eight to 20%. It's like, if I want to become a millionaire, I'll study millionaire in my town and find out why they're millionaire, same way. So you see that typically they have 4% breakouts, right?
Then I look at their capitalization. you'll see that their capitalization and if you do this study over a large period of time you'll see that most of the stocks which will make 20 move in a short period of time they'll have capitalization below 10 billion most of them in fact will have a capitalization below 1 billion so that's another thing so i always look at these stocks same way i look at stocks which are down 20 for the week and i studied them also because you want to see on the short side what works right and basically so that's another thing which i look for and the 9 million ep I trade it on the short side also. So this was a 9 million EP on the short side also, just for example. And I also look at a stock which are up $20 plus, right? These stocks are up $20 plus.
Because I trade high price stocks in last five days. So I focus on Netflix, I actually had a position I sold because it hit my stop. But I bought Netflix on this particular day, and it made a move small move.
So I trade these high price stocks, I look at anything which is up 20% plus, then I look at what really drives them what happens at the beginning in the move. And I'm very happy that I found this O'Reilly I found, I also traded SMCI from this. last week.
So that's a very good week. When I find trades I made showing up in this particular list, right? And basically, so that's a good idea.
Then I also study on the weekend. I study stocks, which are up 50% plus in last two months. So these are stocks which are up 50% plus in last two months.
So I go and do a deep dive on them. I look at what catalyst was there or how did the move start? What is the capitalization? Again, you'll see that capitalization below 10 billion.
If I have to give one advice to anybody who's starting out, focus on stocks which are capitalization below 10 billion, right? And second advice, if I have to give you, is news. Because almost every one of these stocks, which have made a 50% move, had a catalyst. So news moves stocks. Chart pattern doesn't really matter.
If there is a news, Chewy had a news, because of that it made. Each of these stocks had a news, and because of that they made a move. 50% move if you want to find in short period of time, focus on news, not chart patterns. I mean, chart patterns are important, but like why did this stock make a move?
Because there is a catalyst and then try and find out what catalyst makes stock go up. Why? There is a catalyst here, right?
So catalyst is very important. Capitalization is very important. Those are the two things which I think are the essence of understanding news.
Pay attention to news. Excellent. And I want to ask you to expand a little bit more on situational awareness and how you develop it, just because I think it's so important and you emphasize it so much. So can you talk a little bit about what the concept is, maybe touch on the market monitor that you keep and just in general, how you track, you know, how aggressive you're going to be, what type of setups you're going to focus on, all that would be great. Okay, so I'm just going to erase this particular page so that it's easy and it doesn't become all mixed up.
But like an let's go a new page and then look at situational awareness. So situational awareness is the overall filter on all my trading. Basically, it's an overall filter which is going to determine whether I'm going to buy breakouts or not going to buy breakouts, whether I'm going to be like getting very aggressively on margin or whether I'm going to be like any putting in a lot of trades or whether I'm going to go in and first five, 10 minutes, 15 minutes, I'm going to put a trade or not.
So this is a filter which basically allows me. to calibrate how aggressively I want to trade basically. So it's an aggressiveness filter basically. I call it an aggressiveness filter for that reason. So in order to do that I'm just trying to answer every day in the morning one question and which is are breakouts likely to work right. And if breakouts are likely to work, then I want to buy breakouts.
If breakouts are not likely to work, I might see a lot of breakouts in my scan, but I'm not going to do a breakout. So in order to do this, I have multiple sources of information which allows me to develop situational awareness. One of the tools which I use is what is called as a market monitor, which basically monitors market breadth.
at a very simple level like this is a tool which i developed many many years ago 20 years ago or more than 20 years ago which every day looks at whether there's a buying coming or selling coming what is the buying pressure selling pressure in the market on different time frames right so when you see here in the last one two three four five six seven days there was more selling than buying you also see that there are number of stocks 25 in a quarter there are more stocks down than up there are 104 stocks which are down or 126 on this day than up 25% in a month. So there is a selling coming into the market, right? So as a result, there are only select stocks which are working and there are a lot of stocks which are breaking down. So this essentially when all four columns are green, when all four columns, this one, two, three, and four columns are green, it's a good time to buy breakouts.
If any one of these columns is red, you're going to get a choppy market condition. To simplify, like we can go into more details of this, but it's going to be a long time. I'm just simplifying it for people, right? Whenever these four columns are green, your breakouts are likely to work.
So that's one of the things, right, I look at. The other thing I look at is this 20% study which I talked about. So this what I found is this 20% study is like a oscillator.
So if the 20% study has low numbers, if the numbers are like below 20, if the numbers are 10, 14, 15, then you see a lot of buying comes into the market and for next five, six days breakout work very well. If these numbers go above 100, then you see that the market tends to get hit with selling. So this is another thing which I look at it. The other thing which I do is like, we didn't really get time to talk about anticipation, but like I have an anticipation method which I have discovered, which is more like rather than me discovering, the members have discovered and I use it nowadays.
So I monitor these stocks, which are up 15% plus in last 10 days to look for a second leg on them. So these are stocks which are up 15%. So I go through all these stocks. And when I go through these stocks, I see.
that this stock instead of setting up nicely as a continuation setup has failed right so that gives you an idea when you start looking at this or you see like the breakouts are not really having three to five days moves many of them are just like not really going and following through so here like there was a first leg established but it failed so that gives me a hesitation or it tells me look and a breakout's not really working so combination of this is going to determine this in addition to this Whenever I look at this 15% study or whenever I'm looking at any one of these things, I'm always looking at what theme is working, what kind of stocks are working, what sector is dominating this. Because this is stocks which I made 15% in the last 10 days, any time during the last 10 days, right? So I know what sectors are working.
I know like the semiconductors was working, AI related was working, biotechnology. So then I know what. to focus on so that allows me to focus on certain things right so as a result of this there are times when i'm very aggressive and there are times where i sit on hand right and then all that it does is it allows you to not get see if you get chopped it's very frustrating and as a result of getting chopped you start changing your methods. A lot of time, when people start getting chopped, they start dropping their holding time period. Soon they become day traders, and soon they become scalpers.
And then they cannot get back to doing swing, they cannot get back to holding 3-5 days. So I try to avoid that, and I try and trade more aggressively when situation is in my favor, and chop when it is not in favor. Plus, where I am in my life situations and conditions, today I don't need to trade every day. to make money right and i mean i am i if i don't trade anymore ever in my life i'm fine so i am very selective i am trying to like avoid all times of like all under all conditions what i'm trying to avoid is getting chopped or getting into a negative this thing so that's why i have a philosophy which i operate with nowadays and which is find a situational awareness where you can find free money right where your Breakouts are working, you know things are working.
That's where you go aggressive. Rest of the time, just like in a close the shop, don't get tempted and sit on hand or like do something else. And would you say this is one of the common problems or mistakes that traders make?
Is there they're trying to always be the same level of aggressiveness despite whatever the market condition is? Yeah, they're over trading or they're like in a trading in market condition where breakouts are not likely to work. And they get chopped and they get chopped.
And then as a result of that, they lost confidence. And I see it all the times, right? This works both ways, right? A, you can get chopped. But there are times when I see my 20% plus study is going very like 200 and all.
And that time people are overconfident because five, six, seven days in a row, breakouts have worked like chop. So they are like in a thinking, oh, I'm a genius. I moved my account 20% in last 10 days.
I'm going to buy an island on island. I'm going to have a bikini clad woman waxing my ear and polishing my Ferrari and then the coconut falls on their head. And so as a result, this lack of situational awareness is what in the beginning years of a lot of trader creates the swings in their equity cow or their mood, right? And if your mood is swinging your equity cow swings.
Right. Right. So that's the, these are all, see in retrospect sitting here, I can talk about these things because I survived and I developed these things, right?
And about for a beginner. he doesn't even understand this is his problem so even if you tell him that this is his problem it's very difficult for them to even accept that this is the problem they have right right for for traders who are watching this who may be you know very early in their in in their learning and with regards to trading um do you have any advice for them in terms of you know developing a system uh you know becoming more profits uh process focused you know, particular setup that they should focus on first. My number one advice would be to find something which is structural in nature. Right. Which is something which is like the Newton's law is structural.
Right. If I throw this bottle, it's going to come down. Right.
And it's not going to go up. Find something which is structural in the market. Momentum is structural in the market. Right.
People have done PhDs on this or PEATS, which is post-earning announcement drip, which is basically the idea behind EP. is like based on that right or whenever there's a volatility compression volatility compression results with a range expansion that's a very fundamental structural nature of the market so if you are news moves stocks is a fundamental thing right and that's like every week you look at the stock which made a big move it will be based on news so this is so fundamental or structural to the nature of market if you base your trading based on that you will increase your profitability potential or your probability of becoming successful second is i talk to a lot of traders as you know i run a site and i also talk to people outside the site and a lot of time i talk to people every week i talk to people and i will tell you 80 of the new traders don't have a setup and they don't know that they don't have a setup so first find a setup and for that i would advise the easiest way to find a setup is to just copy shamelessly Copy shamelessly some setup which has worked for someone. That's the easiest way because you don't want to reinvent the wheel. Just like do it and over a period of time, then you can like develop your own style. I copied shamelessly the Mark Butcher method and then I developed my own things based on that, right?
All actors, when they start acting, they're copying some famous actor, right? that's why and then later they develop their own style or the chinese copy us ideas and just like in a pass on to us and sell to us right so same way copy shamelessly and the other thing is basically do a deep dive do a deep dive go and like if you're going to be trading breakouts study five thousands six thousand ten thousand twenty thousand breakout before you put one dollar on a breakout if you want to trade your ep Study 100, 200, 300, 500, 8000 EPS before putting one money into it, right? And then that will give you the real expertise in trading is not going 5 feet deep, is not going 50 feet deep.
If you can go 500 feet deep, if you can go 1000 feet deep, you can go 5000 feet deep, then you start understanding, right? I study 20% plus every day. I've been studying it for so many years, right?
And I discovered a pattern on the short side, which I didn't see it in retrospect. When I see it, I like, how did I miss that? Right? So there is always something which you're going to find when you go deeper into things. And I don't know of any trader who's been successful, who has, he may not use the top dive, but the methodology which they used was something similar to deep dive where they studied past winners.
They studied, they dive deep into it. And that is the success, which is there. That is why they're successful. Right? And is that how you do you?
notice and develop the different variations on your setups and how they're changing over time? Yes. So like this 9 million EPA and delayed reaction EPA, I developed by studying the 50% plus moves in 40 days.
Because when I looked at them, I saw like there are high volume spikes, high volume spike. Or when I studied these big winners in a short period of time, the only thing common with them was news and high volume spike. So I said, okay, what is the magnitude of that spike? Is it 5 million?
Is it 6 million? I noticed that it's around 10 million. So I gave it a room to run of 9 million and I decided to focus on that.
So everything which I do comes from my deep dive and continuous learning from the market basically. It's the same thing like I see every day people telling each other that stocks which hold up the best are the ones which go on to make a move. If you do a 50% study, you will debunk that in five minutes because the stock which go on to make the biggest move, they don't come from the stocks.
which are holding a bill they come from the stocks which are beaten down the most right now that's what it creates an edge because otherwise if you're taking a second hand age And just like saying the same thing others are saying, then you're not going to believe that. But when you look at the stocks which make 50% move, they all have one thing in common. They have news and they are coming from a weakness.
They are not coming from strength, right? They are not coming from strength, most of them. They come from some place where they were like beaten down and then they suddenly make a 40-50% move.
And this is a very common pattern which you're going to see. GME, nobody was paying attention to it. It comes from nowhere, right?
So the more the stock is... neglected, the more likely it is going to make a 50% move. Now that's an age which you can develop by doing a deep dive, which you are never going to do by just reading books on trading. Fantastic. I think that that's all the questions I had for you, Pradeep.
But first of all, I want to I want to thank you for taking the time to walk us through both of your setups very in depth. I really appreciate it. I think what you presented was very dense. So for everybody watching. I'd recommend watching multiple times because you're going to get something out of each time that you watch this.
But Pradeep, thank you so much. Is there any kind of final message that you want to leave everybody with today? Yeah, I think in order, if you want to become a profitable trader, have self-leadership because this is a game of self-leadership.
You have to be really motivated to do this. This is not for everybody. Unless you have self-leadership, you'll not make it in this business.
Great. Well, we'll leave it at that. Thank you again, Pradeep, for your time and for putting this together.
To everybody watching, make sure you leave a like down below, subscribe if you're new to the channel.