Momentum Trading

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, staying in a house filled with trading books while working on a failed startup, and getting drawn into the markets by sheer proximity. His first quantum leap came from a single paragraph in a book he was reading late one night — the author described how stocks with massive earnings acceleration (300%, 400%, 500%+ profit growth) can double or triple in weeks. The next morning he found USLB (US Laboratories) in the Investor's Business Daily newspaper 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 Episodic Pivot momentum strategy.

"I just put all my money in that trade and in less than six weeks I made more money than I had ever imagined in my life in one trade. And that became the EP kind of an idea then."