The Episodic Pivot (EP) is a powerful trading setup that aims to capture explosive price moves in stocks.
CAVEAT: Do not get rug pulled or overtly focused on the profits. You HAVE to manage your positions with the correct ENTRY and EXIT. Back test as much as you can. You ARE responsible for EACH trade you make.
It was popularized by the stock trader and educator, Pradeep Bonde (known as “Bonde” or “@traderstewie”), who runs the Stockbee community. Let’s break down the criteria for identifying an EP:
Big Move:
The stock must exhibit a considerable price gap of at least 8–10% or more.
The volume during this gap should be a multiple of the average daily volume, such as 2x, 3x, 4x, or more. YakBro —[ Break Out Scripts — Studies, Scanners and Custom Quotes — yakBro ] talked about 9MM volume as well ]
Ideally, this volume surge occurs early, either during pre-market trading or within the first 30 minutes of regular market hours.
Orderly Consolidation Before Explosive Move:
Before the big move, the stock should demonstrate an orderly consolidation phase.
Avoid jumping into stocks that are doing well without this consolidation. Stocks without consolidation are riskier and may lead to being left with losses or holding bags.
Catalyst:
Look for specific catalysts that can trigger the move. These could include:
Earnings beat
FDA news
Media mention
Analyst upgrade
CEO change
New product launch
PR release
Twitter pump
Sales numbers
Sector/industry boost
Entry and Exit Strategy:
Entry:
Wait for the opening range breakout on high volume.
Observe the first 1-minute candle and its volume.
Consider adding to your position if the stock continues to act well throughout the day.
Exit (Stop/Take Profit):
Stop loss: Always set it at the lows of the day.
Ensure that your stop loss is no more than 1x or a maximum of 1.5x the average daily range or the average true range.
Take profit: Sell 1/2 to 2/3 of your position 3–5 days after entry.
Keep the rest of your position in play.
Consider using a trailing stop after taking profit.
[NOT FINANCIAL ADVISORY]
[CONSULT YOUR STOCKBROKER, ACCOUNTANT, BANKER, SOLICITOR OR ANY OTHER PROFESSIONAL ADVISOR FOR GUIDANCE]
Remember that EPs are characterized by news events that catch the market off guard, forcing a re-evaluation of the stock. Institutions accumulate positions over time, so be patient and follow the criteria diligently. Different traders may have slight variations in their EP criteria, but the core principles remain consistent.
Keep an eye on the opening range, volume, and the stock’s behavior throughout the day. EPs can offer significant trading opportunities when executed correctly. 🚀📈
Note: Episodic Pivots are also known by other names, such as Power Earnings Gap (PEG) by @traderstewie and Buyable Gap Ups by Gil Morales and Dr. Chris Kacher.
[NOT FINANCIAL ADVISORY]
[CONSULT YOUR STOCKBROKER, ACCOUNTANT, BANKER, SOLICITOR OR ANY OTHER PROFESSIONAL ADVISOR FOR GUIDANCE]
There are several scanners out there that captures Episodic Stocks. This is the ThinkOrSwim scanner >> Episodic Pivot — https://tos.mx/0PvYm64
You can always modify the scanner to suit your trading style.
[NOT FINANCIAL ADVISORY]
[CONSULT YOUR STOCKBROKER, ACCOUNTANT, BANKER, SOLICITOR OR ANY OTHER PROFESSIONAL ADVISOR FOR GUIDANCE]
See more articles on Episodic Pivots here :
[cited]
Episodic Pivot: The Most Powerful Setup Explained — Analyzing Alpha
Episodic Pivot / Power Earnings Gap / Buyable Gap Up | TradingSim
Break Out Scripts — Studies, Scanners and Custom Quotes — yakBro
