Episodic Pivots Delayed Entry — Transcript

Full transcript

1. 0:00do you need to enter an episodic pivot
2. 0:02on the day of the entry and the answer
3. 0:05is no not necessarily especially on the
4. 0:08short side on the short side if you're
5. 0:10trading episodic pivot where stock had a
6. 0:12very negative news or missed earnings
7. 0:15then actually entering on the day of
8. 0:17earnings itself can be a very high risk
9. 0:21trade because what happens is the stock
10. 0:23might gap down and it recovers and it
11. 0:26rallies for a couple of days and then
12. 0:27the real ra breakdown starts up someday
13. 0:31so delayed reaction to earnings or
14. 0:33delayed reaction to an episodic p is a
15. 0:36very good setup in this kind of a thing
16. 0:39what you do is you don't short it or you
17. 0:42don't go long on the day the episodic p
18. 0:45is and especially in this video I'm
19. 0:46going to focus on short side and on the
20. 0:49short side this is a very good setup
21. 0:51where you can find stocks which had
22. 0:54negative earnings or they missed
23. 0:56earnings and then they gap down or they
24. 0:59went down and then they bounce back for
25. 1:01a couple of days and they have sometime
26. 1:03it is just a two or three days bounce
27. 1:05and when they start breaking down and if
28. 1:08you enter on that particular day it
29. 1:10gives you a lower risk trade so here are
30. 1:12a couple of examples of this kind of a
31. 1:14trades which I'm going to show you on TC
32. 1:162000 so let's look at some of these
33. 1:19examples so let's look at like smtc as
34. 1:23an example of this where there was
35. 1:25earnings news and after that news the
36. 1:28stock gap down now if you tried to shot
37. 1:30it on the gap down day it recovered for
38. 1:32rest of the day but second day entry was
39. 1:35very good because it gives you a very
40. 1:38low risk kind of an entry and
41. 1:39subsequently if you didn't manage to do
42. 1:41the second day entry uh subsequently
43. 1:43there other entry and after that the
44. 1:45stock has gone down 18 to 15%
45. 1:49similarly couple of days ago net had
46. 1:52earnings the earnings Miss was a big
47. 1:55onnet but in this case what happened
48. 1:57with that Miss in earnings is that this
49. 2:00particular
50. 2:01stock actually recovered and this
51. 2:03happens because there is a tendency of
52. 2:06those who are shoted in anticipation of
53. 2:08a negative earnings to cover their trade
54. 2:12and then uh basically the rest of the
55. 2:15DAT Traders pile on and the stock
56. 2:17rebounds but after that next day
57. 2:19shorting it uh was a very lowrisk kind
58. 2:22of an entry for a possible trade where
59. 2:24the stock can continue to go down
60. 2:26because there is a catalyst for this
61. 2:27particular trade similarly if you look
62. 2:30at
63. 2:31crdo crdo had a news which was a very
64. 2:35negative news it gaped down but nothing
65. 2:37really happened on that particular day
66. 2:39and then it goes sideways and then it
67. 2:41breaks down and from the break down the
68. 2:43stock went down 20% similarly W is an
69. 2:48example of this where the stock had this
70. 2:50big news Catalyst and then after that it
71. 2:54recovered for 3 to 4 days and then on
72. 2:57this particular day there was an
73. 2:58opportunity to sh it so delayed reaction
74. 3:01to earnings is a very good strategy
75. 3:04because if you try to sh on the day of
76. 3:07the earnings unless you are early you
77. 3:08might not get the best risk reward but
78. 3:11after a weak rally of 3 to 4 days or
79. 3:14sometimes the best entry is on the next
80. 3:17day is very good entry so this is
81. 3:20another example of a trade like this now
82. 3:22obviously when you are trading the
83. 3:25episodic p on the short side you're not
84. 3:28going to get the same kind of a profit
85. 3:30as what you get on a long side because
86. 3:33long side The Profit potential is
87. 3:35unlimited on the short side you'll have
88. 3:37to be happy with the smaller profit so
89. 3:39this delayed reaction to earnings is a
90. 3:42very good setup and for those of you who
91. 3:45cannot enter an episodic pivot on the
92. 3:48day of the entry or the risk might be
93. 3:50too high because of the stops involved
94. 3:53in that delayed reaction to ear thingss
95. 3:56or delayed reaction to an episodic pivot
96. 3:59is entry strategy which can work very
97. 4:02well and this can work even on the long
98. 4:04side