31. EP 9 Million (EPV) - Basics
[1. Setup Mastery] - [1.3 Bullish Setup] - [1.3.5 EP 9 Million (EPV)] - [1.3.5.1 Basics]
What exactly is life changing EP doing to account. It is moving the account by 50 to 300% in one trade. After looking at every single stock which moved 300% in a short period of time the hypothesis was earnings or sales which sounds logical.
But out of so many stocks only 20% of them move because of earnings or sales. So 80% of stocks make 300% but they don't have earnings or sales but make really big moves, Crazy moves. So 80% of the moves, The big moves that happen can’t be explained using logical earnings or sales in fact they don’t have anything.
Again at the beginning of the move, How can we tell that this stock has potential to make a big move. After investigating, It was found that most if not all stocks in that, 90% of them had a 9M plus volume breakout which triggered their big move.
Big volume itself is a catalyst that can't be explained logically. And also this is for someone who doesn’t want to overthink life.
Scan for it is V>9 million and additional condition C>3. So there is no magic in the scan but the real magic is what you do after the scan.
After running the scanner if you find a stock then it's further classified into CAT, DOG and LIQUID LAVA.
CAT - Clearly identifiable explainable catalyst. Which might be the same things as sales and earnings etc.
When EP 9M scan is run and there are things that are logical and explainable then that stock has a catalyst. And when EP 9M scan is run then there are things that are not logical and can’t be explained and when you look at news and there is a story, Some story.
To find a trade that has genuine catalysts is very difficult because they are rare compared to finding a trade where there is a false story. And research also shows that 80% of the move happens because of the story and people love the story.
Throughout the history of civilization people love stories. Who knows if it is true or false but it's a story the same way Ramayana and Mahabharat is a story so people love it.
So story stocks make bigger moves then stocks with catalyst and for every stock with catalyst you can find 50 stocks with stories and they make big moves. Even if the story seems half possible, let us bet on it like space travel.
Only difference between CAT and DOG is the size of the bet. For CAT we can bet big but for DOG its 5 10% or 20% not more than that. And there is a 3rd kind of stock which is LIQUID LAVA which everyday trades 9 million volumes.
Now can you put a large size for a 2-3 days swing compared to a normal CT or CD? Answer is yes. You can size big especially when capital is in millions.
When capital is big it's easy to move your account here because of size. Just by doing BB CD CT. So setup here is also CT CD BB only difference is its high liquidity.
And even in DOG the setup is CT CD and BB only at least some kind of it and not buying something which is up 2 3 days in a row. So setup is the same but size is not big as it's for life changing EP and its not worth it for that kind of risk.
CAT - In this case if you find a stock with a catalyst in an EP 9M scan then there is a problem because you should have found this before the market opens. That means the NTRT MTRT process is out of place. This process should have picked this stock any day. But you can still get in. If you find a stock in CAT in a 9M scan with genuine catalyst then its process failure.
DOG - These are tricky ones that you can't understand you don’t know and do you know will it make 100%? Answer is no, Even if you see news you don’t know. But by 10 o'clock you see a big volume and you see a story then you can bet on it so why not.
Only thing here is you have to dig in the story and see if it's possible or not possible and then put 5-10 20% in the account and managing your risk is the game. Unlike CT CD BB trades where there profit potential is 8 to 20% here there is huge volume and story so target will be more than just 8 to 20%.
Whole idea of doing EP 9M is to do bigger magnitude trades that are 40 to 300% that's why we are doing this not for 8 to 20%. When you are trading story stock then you should immediately start thinking 40 to 400%. If there is a huge volume then stock can double triple.
Only trade where you have to look for 5 to 10% profit is LIQUID LAVA. And story stock is a big misery why do they make big moves and some things don't have to be logical.
How to exit, Just by trailing. This is also not where you should micromanage trade. That is also the reason why we don’t put 50-100% of the account. Some of them have guts to put in big capital and double tripled their money.
Before any trade, have a profit expectation. And when you're considering EP 9M or EP life changing objective is 50 to 300% not 8 to 20%.