My profile is protected by Zulu Dick shrinking curse. To all scammers creating fake profiles, everyday your private part will keep shrinking. Look down .
If you want to be a highly profitable trader get a good keyboard and mouse and learn how to search on Google or on websites or Twitter. . I answered over 30 DM about Episodic Pivots after
@Qullamaggie
presentation yesterday. All I had to do was search on Google my previous posts
Trading is learned observation. More you observe and analyse and understand more edges you build. One of my every weekend study is stocks up 50%plus in last two months. More you do it more nuances on entries and exits you find.
If you want to build edge , doing research yourself is key. Just listening and asking others for insight is like watching porn rather than having sex yourself .
Unless you have profitable setup, process, and tools no amount of trading psychology is going to make you rich.
Claims of trading is 80% psychology are misleading and can cost you money and time as you keep thinking your issue is psychology.
Look for stocks with big catalyst everyday (Episodic Pivots). You may not find them everyday, but once in a while they show up and just few of these big trades can make your year or sometime can change your life.
Breakouts in bad markets look as good as breakouts in good markets; the only difference is what happens after breakouts. In a bad market, even good breakouts fail.
There are many. The key one was in 1999 when I created a database of stocks that had made 25% plus move anytime during the month and started studying it to find common factors that will explain why stock made that move.
For months I was looking at things like fundamentals,
For solving trading problems, I always classify them into 4 types.
Is it a setup problem
Is it a situational awareness problem
Is it a process problem
Is it a trader problem
Once the market closes, hit the gym. Nothing clears your mind for trading like a hard workout. Try doing 15 sets of 20 of this and see how it improves your trading.
If you want to be profitable trader, run trading like a factory with set process.
Process orientation will quickly make you profitable. Focus on the process, and perfect it. Think of step 1, step 2, step 3, and so on. Think when to run what process. Think through most efficient
So many traders over the years have copied the setup idea of Episodic pivots and made it work. Because it is inherent to the way markets works. Post earnings announcements drift is well known markrt anomaly and EP is based on that.
Finding your edge is the first task for traders. After that going in depth of that edge without getting distracted by other edges is key. Too many don't stick to one edge.
Buy in consolidation in a momentum pause in anticipation of a breakout or buy on a breakout after the momentum pause.
This is the basis for many swing trading methods.
If you study same thing daily for 20 years you find things others may have missed. Every day I study stocks up or down 20% plus in 5 days or up or down 20 dollars in five days. Every week I study top 100 winners YTD, 1 month, 3 month 6 month , year.
One life hack which can change your life in 2024, is developing self leadership skills.
Self leadership is about your ability to lead yourself, innovate, find solutions to your problem and motivate yourself.
It is your ability to make and sustain big changes in your life.
It
Breakouts should only be traded when they are highly likely to work. Develop a Situational Awareness filter to trade them during favorable times. As of now, only news catalyst-based breakouts are working.
For solving trading problems, classify them into 4 types.
Is it a setup problem
Is it a situational awareness problem
Is it a process problem
Is it a trader problem
Trader problems are most difficult to solve
Good traders are a self-learner. They constantly learn and refine their understanding of markets, setups, processes, Situational Awareness, and tactics.
If you are serious about making money from Episodic Pivots do a Deep Dive on it, search for my post on free site. Study it in detail. Last person who did it is on way to hit 100 million USD and now boating instead of trading.
@Qullamaggie
Go deep in to one setup. Find variations of it. Make it work. Then only go to next setup. It takes time to understand and make one setup. When traders flirt with many setups they are not investing enough time to make it work. As a result they get frustrated and lose money.
Trading profitably is a process problem.
Toyota did not invent the car. It invented a process to make quality cars and beat the pants of others.
What works in the market, like momentum, PEADS, Episodic Pivots, Stocks in plays, breakouts, pullbacks, volatility cycles, small-cap
As an active trader I target 8 to 40% move in 3 to 5 days. These moves are short term momentum bursts. In order to understand these better everyday I study stocks up 20% plus in 5 days.
If I have one advice for beginner traders: simplify things.
Simple setups are more profitable than complex setups. Too many indicators, too many rules, and trading too many setups lead to brain freeze.
Cognitive overload becomes a big problem when you trade complicated setups or
If you want to make money from Earnings Episodic Pivots, focus on three sectors: technology, healthcare, and consumer discretionary. That is where the biggest post-earnings moves happen.
Momentum burst is a structural tendency of a stock to move in 3 to 5 days of bursts, and during this period, they make an 8 to 40% move. That is an observation you can find doing deep dive.
But this information is useless, and your deep dive is only helpful if you have a process
I value creativity more than discipline in trading.
Creativity is required to find unique low-risk setups or trade the same idea differently. Or to find alternative entry or exit techniques. Or to develop unique processes or use or develop unique indicators.
Creativity is
Situational Awareness (SA) is the ability to trade according to the overall market environment. Momentum burst breakouts work best under certain market conditions; identifying those conditions, trading them aggressively during that period, and avoiding periods when they are not
One of the ways to make money swing trading is to have laser like focus on stocks currently in low volatility consolidation zone. This kind of work helps you anticipate breakouts.
As a trader in beginning years we spend so much time chasing wrong directions and ideas. If I were to start all over I would focus on news and stories exclusively.
There is so much money in news reactions and story stocks for traders.
Market loves stories and themes.
Process creates an edge. Setup ideas are every where, but is the process orientation to implement those ideas creates an edge for traders. Do not only study setups, study the processes trader use to implement there setups. Profit is an outcome of well designed process around a
If you are a beginner trader or struggling swing trader get obsessed with studying what makes a stock go up 20% plus in a week, what makes it go up 50% plus in two months or less. Study three, six, twelve month winners till you see what makes them go up. Deep dive those moves.
Fix your trading problems in the next 48 hours.
What went wrong today?
How can I fix it tomorrow?
To be profitable, you need to have a massive sense of urgency.
Find three solutions to your problem and try them; if they don't work, develop three more solutions.
Find out how
Self leadership is about your ability to lead yourself, innovate, find solutions to your problem and motivate yourself.
As a trader if you do not have it you are not going to make it.
This is a demanding field which quickly weeds out traders with poor self leadership skills.
How to eat an elephant
one bite at a time
Doing a mini Deep Dive daily or weekly is more accessible than doing a big comprehensive Deep Dive. The learning multiplies every week.
Your understanding increases weekly, and you start getting greater mind clarity.
Remember, very
Many try trading , few prosper for years.
You have to be insanely motivated and have extremely high self leadership quotient to do this. Only probably 5% of traders have that insane drive.
Process orientation will quickly make you profitable. Focus on the process, and perfect it. Think of step 1, step 2, step 3, and so on.
Create process checklists for trading
Run process. Dissect process. Fix and move to the next process.
Study other's processes, learn from
If you wait for volume confirmation on momentum burst it will cost you money. Price break often attracts volume as other traders notice it and pile on.
The most important decision in trading is to decide on a style.
Do you want to be a Day trader
Do you want to be a swing trader
Do you want to be a long-term trader
Once Timeframe decision is made, then it becomes easier to develop a style
.
If you are serious about making money start the year by doing deep dive on a setup like momentum burst or Episodic Pivot. One intense burst of Deep Dive of few weeks can pay you off for rest of your life in trading.
Don’t become a scan collector.
Learn setups. Deep understanding of setups will help you more than any scan. Catalyst based setups will improve your trading dramatically and do not need scans.
Scans anyone can write. It is setup that is more important.
Keep a watchlist of stocks that reacted positively to earnings (earnings Episodic Pivots) , they always offer another lower risk entry opportunity after few weeks or months. Some offer multiple opportunities.
I value creativity more than discipline in trading. Be creative. Be innovative.
Creativity is required to find unique low-risk setups or trade the same idea differently. Or to find alternative entry or exit techniques. Or to develop unique processes or use or develop unique
One life hack which can change your life is developing self leadership skills.
Self leadership is about your ability to lead yourself, innovate, find solutions to your problem and motivate yourself.
It helps you in all walks of life. But for stock traders it is even more
My profile is protected by Zulu Dick shrinking curse. To all scammers creating fake profiles, everyday your private part will keep shrinking till you can not even see it. No urologist will be able to fix that. 😃
For beginner traders and struggling traders, a lack of setup and confidence in setup prevents them from setting up a process, and as a result, a lot of energy is spent doing random things.
Set up a trading factory with a well-designed process and run it efficiently.
Set up a trading factory. Well-established setups and processes to extract money from the market by doing the same thing in the same way, in the same set of sequences. Adjusted for Situational Awareness
There is lot of information in market about trading . You don’t need information to make money, you need a formula. Almost all consistently successful traders have formula mentality and they ruthlessly execute formula.
I reverse pyramid. I take a large position and peel parts of it as the stock moves in my favor and allowing the last 20% to run as much as possible. We call it 80:20. if done right it can turbo charge returns.
If you want to be a profitable trader focus on process.
Process orientation will quickly make you profitable. Focus on the process, and perfect it. Think of step 1, step 2, step 3, and so on.
Create process checklists for trading
Run process. Dissect process. Fix and move to the
If you operate with a well structured and thought out framework for decisions making in swing trading, and then apply a situational awareness filter to calibrate your aggressiveness, you can avoid unfavorable trading conditions.
I have a daily and weekly process to study stocks up 20% plus in 5 days and stocks up 50% plus in 40 days in last one month.
Most of my Eureka moments have come from that one study and lead to many setup ideas.
I am obsessed with magnitude moves.
Now we have a project to study
When market becomes difficult for your style of trading , there is often tendency to style drift. As a result when market conditions improve you are not ready for it.
Nothing is going to happen till you have a trade factory ready and use it daily.
Nothing is going to happen till you have a trade factory ready and use it daily. Without that you will have cognitive overload.
First develop setup, scan, process mind clarity and then setup trade
Build a three-pronged strategy. Hit lots of singles doing 3 to 5-day swings, risking a small amount. Then, use those winnings to bet big once in a while when a good EP shows up that needs a wider stop. The third strategy should be to develop setups that need tiny stops and give
Stocks move in momentum bursts of 3 to 5 days during which they can go up 8 to 40%.
At a start of a momentum burst there is one day buying imbalance. If more buying comes the range expands and you get big candle which closes in one direction.
This is noticed by others and more
While there is money in earnings based Episodic Pivots, there is 100 times more money on story stocks EP. The story stocks make bigger moves than stocks with earnings and sales or catalyst. Understanding what theme is working and finding story EP in them is now my major focus
If I have to give one advice to a new trader, it would be to hunt for a setup. All successful traders trade a setup or a bunch of setups. They have skill specific to their setup. Setup is a set of conditions used to find, qualify, enter and exit a trade.
Successful traders have
Three types of stocks will make big moves as and when market turns : turnarounds, growth stocks with back to back quarters of revenue growth, and story stocks.
366 stocks in the last 10 days have established an explosive first leg of a move. Many of these will go on to consolidate or pullback and then have second-leg moves. There will be many opportunities in a few days and weeks if buying continues.
The process once perfected, frees up mental energy as it becomes a procedural memory.
As a result, you can do it with very little energy.
Running scans and finding trades from them in the first 30 minutes is a process
No thinking is needed once you have a process
Managing a
It takes time for struggling traders to understand importance of setup and a set process.
I was contacted by a struggling trader with 80% drawdown in 2021. It took multiple meetings and convincing for him to put setup together and a process. And then in last one year once he had
Stocks with lower floats (under 25M shares) tend to see the biggest episodic pivot moves, as there is less supply to absorb the surge in demand on good news. This coupled with high short interest ( 5 plus days to cover) can result in explosive moves
Momentum Burst is a short term structural tendency of market. Stocks move in 3 to 5 days bursts. It is a significant structural phenomenon and you can build a big edge around it and with right money management techniques you can exploit it for swing trading or day trading.
Finding your edge is the first task for traders. After that going in depth of that edge without getting distracted by other edges is key. Too many don't stick to one edge.
To become a consistently profitable trader you have to make a long term commitment. It to takes time for some people to get good at it because they need time to work through their beliefs and change them.
Look for delayed reactions to Episodic Pivots and earnings breakouts. After the initial day momentum and frenzy have died down, it gives you lower-risk entry after a few days.
As FOMO kicks in more buying came in yesterday. The real strength of this rally attempt wouldn't be known till it it comes under sell pressure. How quickly it bounces back from selling will tell you if there are aggressive buyers.
When you do a deep dive like on 1000 to 5000 stocks studying a setup, in a short time period of days or weeks , you understand that setup and it becomes part of your way of thinking, as you have invested significant brain energy in that activity.
As a result you become good at
Every business is built around the process. Trading is a business. You need to make it process based business.
More efficient your process more productive and profitable you will be as a trader.
Focus on the process, steps of the process, why of process, how much of process, when
Once you have a setup, your problem of cognitive load will decrease because you will be doing a very narrowly focused task. Once you find your own setup you will be able to shut out environmental noise.
If you read the stories of successful traders like Jesse
Livermore or Darvas in their early days they tried scalping, day trading , swing and position trading and ultimately found their style. This is very common path for most traders. Find timeframe that suits your temperament
Many traders blow up before they can find a setup. First step in becoming profitable is to find a profitable setup based on inherent tendency of markets.
Markets have changed since I originally developed Episodic Pivots method. Originally it was focused on earnings plays. In last 24 years market does not care much about profits. sales growth is more important driver. besides that just stories and themes matter more and attract
I had a discussion yesterday with a struggling trader who explained for 20 minutes how bonds are affecting market , how commodities are in multi year bull market and how Fed policy is behind the curve. My question then why are you not making money.
88% of top 25 YTD winners had one or more 9 million volume breakout at the beginning of their big move this year. If you want o find big winners you know what to scan for .
Every setup has favorable and unfavorable market conditions attached to it. Realizing that and only trading it when conditions are fitting is a Situational Awareness skill.
Opinions are not processes. They are beliefs or viewpoints.
Many traders spent an enormous time on opinions.
Instead, focus on the process.
The process will give you a pathway.
Every business is built on the process. Trading is a business.
More efficient your process more
You can work very hard in trading and still not make it because trading needs Eureka moments to solve your problem. This is why many traders, with just one simple flash of insight, can change from struggling to profitable.
Study the psychology of the Eureka effect to understand