Sponsored Link:
How I Use The ESP Profit System & to Make Millions for My Clients
The Smart Profits Report: Issue #194
Friday, March 25, 2005
How I Use The ESP Profit System to Make Millions for My ClientsBy Dean Albrecht
About 30 months ago, I created a computer program and introduced it to my private institutional brokerage clients, and it’s literally generated millions of dollars in profits for them so far.
I call it the “ESP Profit System.” ESP stands for EarlyWarning Stock Predictor and it’s an appropriate name, given the fact this system truly does have an amazing knack for knowing when a stock is going to move… by how much… and how quickly.
It uses complex computer modeling, similar to the systems weathermen use to predict storms… but in this case, it’s tracking individual stocks and funds, and telling us exactly when to buy and sell them for maximum profit.
Today I want to reveal the strategies behind the ESP system, and how you can use one of them in particular to find stocks poised to jump up or down, so you can play them long or short. This simple strategy can also help you choose what option play to use with any stock.
Let’s get to it…
Three ESP Strategies for Predicting Stock Moves…
First, let’s take a look at all three strategies that we have honed with our ESP system. Then I’ll go deeper into the one that often produces the most dramatic short-term profits…
Correlation: This strategy is where we identify the leading indicator or leading stock or index and we find which stocks are highly correlated to it. Simply, if we know what stocks follow other stocks or indexes, then we are taking part in a high probability occurrence.
Cyclical: This strategy knows the ranges of stocks or other instruments and looks to identify them within certain ranges. For instance, the QQQQ moves within a 7% range. Knowing this, our systems look for it to go up and down approximately 3.5% and then signals entries and exits based on these probabilities. It isn’t a sexy, exciting strategy however it is a high probability play that happens over and over again about 30 times per year.
Distressed or event driven: This strategy is based on our screening capabilities to look for stocks that have either gone up or down anywhere from 10% to as much as 50% in the recent past. Once these stocks are identified, our screener then adds another filter and looks for the stock to move into the entry point that we are looking for. With these types of issues, our systems automatically look for certain traits such as decreasing range and increasing volume. Other traits it tracks are upward momentum, if it is in a long screen, and downward momentum, if it is in a short screen.
Although we receive signals and issue both call and put recommendations using all three strategies, sometimes distressed or event-driven stocks are particularly attractive. The profits here can be massive.
Here’s why…
Let’s say that a stock ESP is tracking has gone up or down in value by 10% to 50%. This is a significant move. Even more so considering that such moves are occasionally followed by corresponding “corrections,” moves back into their normal trading range.
We have seen through our studies that once the stock begins moving back into its pattern - after recovering from the big move up or down - it can produce significant and predictable profit opportunities.
Back-to-Back Profit Pops… On “Distressed” Issues
This happened twice in the last month, in fact, with our research calls on the Biotech Exchange Traded Fund (BBH) and on Research in Motion (Nasdaq: RIMM), which is a cellular telephone and e-mail device manufacturer.
Both issues had retreated more than 10% and we were looking for opportunities in both. On March 1, 2005, RIMM was trading at $67, and we issued a recommendation to buy RIMM when it reached $62.
CHART: RIMM HITS OUR TARGET… THEN SOARS
We were looking for a pullback where we could enter the stock or option, which in our minds would offer us a margin of safety. Well, we got our entry price, and within days RIMM bolted up $19.
In the case of BBH, the price had retreated from the high $140s all the way down to $131.75 when we issued a buy signal on it and a buy signal on the call options on the BBH. And BBH moved north by over $11.
These are excellent examples of opportunistic plays to buy call or put options: good stocks that are experiencing a pullback but look to move back up. All it takes is a little buying interest and the potential to profit is outstanding.
ESP: Using State-of-the-Art Computers to Predict Profits
We currently have a handful of excellent candidates just like BBH and RIMM that our screens have picked up, and the profits could come fast.
If you want to take advantage of them you can by subscribing to our new “EarlyWarning Stock Predictor” service that I’ve decided to make available to a limited number of private traders - starting with readers of the Smart Profits Report.
For more on the ESP system, and the profits it’s about to generate for my high-net-worth clients, click here.
Great trading,
Dean
P.S. I’m convinced that the reason ESP works is that no human has anything to do with the recommendations this system produces. Everything’s based on quantitative research. Our program takes a particular stock - looks at millions of data involving past movement and activity - and then, through a series of algorithmic procedures, decides which direction the stock is likely to move, given its most recent activity. Not only does it tell us the direction - but also how high it’s likely to go… and in what time frame. The good news is, you don’t need to know exactly how it works to make a good deal of money from ESP.
|
Related Articles:
- Option Trade Execution: Two Simple Steps for Getting Filled At Your Price
- Short-Term Options - Two Ways to Make Them Work
- ESP Profit System by Dean Albrecht
For more on the ESP system, and the profits it’s about to generate for my high-net-worth clients, click here.
Sphere: Related Content
