Paul Tudor Jones and Episodic Pivots Part2 | stockbee


Paul Tudor Jones and Episodic Pivots Part2

Tudor Jones has made exactly similar kind of comments many times before about how when a market has a range expansion it is signalling a move in the direction of range expansion. 

Paul Tudor Jones In Market Wizard

We have tested every system under the sun and amazingly, we have found one that actually works well. It is a very good system, but for obvious reasons, I can't tell you much more about it. The basic premise of the system is that market move sharply, when they move. If there is a sudden range expansion in a market that has been trading narrowly, human nature is to try to fade that price move. When you get a range expansion, the market is sending you a very loud, clear signal that the market is getting ready to move in the direction of that expansion.
and in recent interview he said...
“Anything greater than an 8 percent move in stocks in one day is probably because of something either so fantastic or so bad that taking more than another day to think about it is a good thing,” Paul Tudor Jones, 56, said.
Think about this long and hard over this weekend. Especially if you are a working person and has very little time to devote to market......
Sometime trading methods are printed on the font page of a newspaper and people still do not get it.............

A simple look at chart of every stock that made 25% plus move in a month would show you that. Even the 4% breakout is based on same logic. What do we want as ideal condition a stock which had not had a 4% plus b/o on either side for last 10 to 20 days and then it breaks out. That is in other words range expansion. In Episodic Pivots instead of last 10 to 20 days you want to look for 100 or 200 days of low range and then range expansion.
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Obviously to make it work you need to build expertise in trading the method and you may not catch every big trend at beginning, but if you catch few in year it is sufficient. I will be redoing the bootcamp on Episodic Pivots next week onwards on members only  site as lot of new members have joined recently and a bunch of them joined in last 2 days after The Kirkreport highlighted the EP post yesterday. 

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QUIKTDR said...

Looking at charts they look tired and although we may see a few more days of a continued upmove, stocks appear more likely to base at best. With the VIX at very complacent levels and earnings releasing respectable returns, institutions have been forced to participate and I wouldn’t be surprised to see some window-dressing this week. Any exhuberance over the G20 compromise is pure rhetoric with no substance and the markets should react quickly upon recognition.I am playing only short-term and very specific buys while buiding a bearish profile once the reality sets in. It will only take one major perception of a stall of earnings disappointment to set the selling in motion. The markets are being held together with duct tape. The only question is whether more duct tape will be added or will traders recognize the fragility of the latest move?

ANS said...

Hello Pradeep,

The scan that you mention in Part 1, can it be replicated on Finviz or another free stock search service? I assume you run the scan on Worden. Do you run it intraday or only at EoD. If I am a working person, and run only EoD, would the strategy still be as effective. Last question, how would you go about setting up selling rules on such buys. Thanks for your advise.

Pradeep Bonde said...

It should be possible to set it up on both Finviz or Stockcharts. I do not use those two scanners.

I use Worden Telechart and run the scab both intraday and end of day.

Yes if a stock has big catalyst behind the move then it goes up for a quarter or over many quarters. It is not a one day phenomenon.

The selling rule will be based on trailing stop.

ANS said...

As a working person, if at EoD I determine which stocks to get into, then should entry be at open or should there be any other entry rules to follow.

Also, regarding the trailing stop rule, would that be similar to the 2 day low trailing stop rule that you use for the 4% breakouts?

Pradeep Bonde said...

No other entry criteria. You can also look at waiting 10 to 20 days and see if there is a pullback and enter on it. But the really good ones don't pullback.

You can try 2 days low as stop.