The way market operates you never know on which day a big Episodic Pivots (EP)stock will show up which can make your year. The essence of Episodic Pivots is surprise and by definition you cannot anticipate a surprise.
One of my biggest EP trade was on a stock which had a EP on a day where only 20-30 or so stocks were up and everything was crashing post the Sept 11 market swoon. It was a company making bomb detection equipment for airports. It went up over 70 times in next 6-9 month and was finally bought by GE.
So the idea should be to develop a very well thought out daily plan for trading EP. To do so you must divide the day in to parts and have plan/checklist for each:
- After market close earnings: This is when companies announce earnings or guide higher. You must have a plan to track both. When doing this find just 1 or 2 good source of information and track it. Do not make it a complex process. I track Briefings earnings page and IBD earnings summary for this. Briefing.com: Earnings Calendar http://bit.ly/g8fu7 (Free resource)
- After Market Earnings Guidance: Earnings Whisper email ( free resource)
- After market close price gainers: This you can find on WSJ page. http://bit.ly/90SxOz (Free resource)
- Before open earnings: Again I look at the Briefings calendar for this.
- Before Market Price gainers: I use IB scanner for this. This scanner I open from 7 AM onwards
These are the only things you need.
Besides that you need conceptual clarity on following things:
EPS: What is is and how it is calculated and manipulated. What drives EPS growth.
Sales: What is sales . What drives sales growth.
Float:What is float. Why is it important.
Growth: What is a growth stock
Turnaround: What is a turnaround stock
Funds ownership: What drives fund buying
Neglect: what is neglect and why it is importantValue: what is a value stock
New Growth: what is a new to market growth
Old growth: What is old (known) growth story
Margin: what is margin and what drives margin
Cyclical growth: what are cyclical industries and what is cyclical growthEarnings cycle: what is earnings cycle
Earnings momentum: what is earnings momentum