Posted by: easyguru, on Thursday, August 27, 2009 13:36 EST
The only thing I am focused on in the morning is Episodic Pivots. Based on my past experience I know 4-5 good EP can make your year if you bet sufficiently big on them. So from early morning I have my IB scanner on. I might be doing other things but I have one eye on the scanner. Till 11 Am only thing I focus on is EP. I don't look at my emails, or work on other things but single minded focus on finding that good trade which can make a difference to your account. The stocks showing up on scanner, I keep immediately researching on Dailygraphs or Moneycentral or Google .
Today morning I saw BA early in the scan, so I immediately went and read the news on it. BA is a very big stock, it showing up with a gap up is big news. So my mind was working (like that example I highlighted yesterday of earthquake in Turkey, so buy all glass companies stock). So my first reaction was look for BA suppliers. I knew about PCP, BEAV (which is more secondary market because it does retrofitting once plane is bought), RTI. So my immediate reaction was to look at PCP and RTI as possible buy, I was looking at BA showing gains of 7 to 8% . So I knew supplier might make similar move. RTI has 22 million float, so will make bigger move. PCP has 138 million float so will not be big mover.
RTI was a stock which was EP some months ago and I had researched it then (besides that I knew it from previous research as it was one of the big mover in last bull market. It was highlighted in IBD many times). Last time when it EPed it was related to a large plane order by UAUA. I was thinking of buying the stock on pullback so I had written a note on the chart like this.
So I quickly started putting in order and bought it.
Did it meet a EP criteria that time , no. But the idea behind EP is to trade the EP concept (behind every big move there is a big catalyst) and not some Telechart scan. The telechart scan is a tool to trade EP. You don't need it to trade EP if you understand the concept. RTI might meet EP conditions by EOD. That is inconsequential.
The main idea behind EP is that new information starts new trends. Surprisingly new information, if it is not priced in stock currently, leads to big trends. If one can enter right at the beginning of such trend then one can make big money. If you understand and internalise this fact then you will be able to identify potential EP fast without running EP scan.