Momentum Trading

Breitstein's rule: size 25% larger when the intraday and daily trends simultaneously align. When a stock breaks out on the intraday chart and is also moving on the daily, weekly, and monthly, every participant category is on your side — momentum traders, fundamental longs, and shorts who need to cover. He uses the AVGO breakout on Nvidia's AI earnings guide as the example: multiple timeframes firing together is rare, and the multiplier is how you capitalize without changing your risk management structure.

"When you identify these trends properly, you can really start to apply it into your trading with these rules."

After two years of day trading, Kristjan began studying thousands of historical charts and noticed a pattern: the biggest moves in stocks take weeks and months to unfold, not minutes. Day trading was inherently limiting — even a large intraday move is a ceiling on what you can capture. Swing trading let him stay in momentum stocks through their full trend and capture exponential returns that no intraday approach could replicate. This insight — that momentum compounds over time, not within a session — was the foundation he built everything else on.

When asked how he scans for candidates, Kristjan is direct: scan for the strongest momentum stocks — those with high relative strength and significant recent price performance. The pattern itself cannot be automated; you have to learn to see it. What he looks for is linearity: how orderly is the pullback or consolidation after the previous leg higher? A disorderly, choppy base is a red flag; a clean, tight range that holds its structure signals institutional accumulation. He notes he now mostly trades large caps because of liquidity constraints at his size, but momentum trading in mid and small caps produced many of his best historical returns when the account was smaller.

Singles — short-duration swing trades lasting two to three days — are not a compromise but a structural necessity: they finance big trades by removing psychological pressure, and their high frequency creates fast feedback loops that accelerate learning in ways long-duration trades cannot. Pradeep introduces a core framework: magnitude moves (fast, 100-200% in weeks) tend to mean-revert, while duration moves (slow, persistent trends over months or years) persist. You cannot force a magnitude momentum stock to behave like a duration stock — the setup must be chosen for the holding behavior you want, not the other way around.

"Your singles allow you to finance your larger trades — if you're dependent on a larger trade and it didn't work out, now you are under pressure. But if you have a combination strategy of singles and home runs, you're not under pressure."

Pradeep traces his accidental entry into trading: arriving in the US in 1998 during the dot-com bubble, reading trading books in a California bedroom while working on a failed startup, then helping his ex-wife manage declining tech shares. His first quantum leap came from a single paragraph describing how stocks with massive earnings acceleration — 300% to 2,600% profit growth — can double or triple in weeks. The next morning he found USLB (US Laboratories) reporting 2,600% profit growth and 900% sales growth, put all his money in, and made more in six weeks than he had ever imagined: the birth of the EP momentum strategy. He then describes the god syndrome — the overconfidence that follows a major winning streak — as a reliable precursor to drawdowns, and explains his self-regulatory habit of reducing position size and writing reminders when he starts feeling invincible.

"It's a heady feeling when you make half a million, one million very quickly — you start believing your own bull. The market will invariably teach you a lesson once you get that god kind of syndrome."