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Well, here we are again, that time of the year when
companies begin to post their earnings for the final quarter of the year. The
famous, Earning Season trading sessions can provide the ultimate trading
atmosphere for any trader, no matter how green or ripe the trader is. As
usual, Earning Season generally gets off the ground to a rather quiet start at
the beginning of the first month following the end of a quarter. It does
however, take very little time to get the Earning Season ball rolling.
There are traders who focus on trading during Earning Season
only and pull out of the normal day trading routine during the final days of the
quarter. The best route to follow for trading the markets during Earning Season
is to get in on the sessions early and hang in there into the final week or so
of the season. Monitor scheduled earnings each evening, for the upcoming trading
session. Track who is going to report when and watch the trading activity for
those stocks, the day prior to earnings release.
Frequently stocks will provide nice trading action, ahead of
earnings announcement. Possibly some one knows something and the cat is out of
the bag. Traders pay close attention to news, ahead of earnings release in an
attempt to catch any tips as to which way the earnings ball may drop, on
companies they are watching. Many traders will jump on the short selling band
wagon for certain stocks, ahead of earnings, after they compiled much research
on potential earnings to be released, if guiding toward the negative side.
Earning Season traders should exercise extreme caution in any trades placed,
prior to actual earnings release. Trading ahead of Earning Season for any stock
should be done with minimal shares, to avoid getting in too deep on any one
Earning Season position.
Many traders will monitor upcoming earnings scheduled and
merely make stocks scheduled for earnings, day trades. It is common for stocks
to develop substantial trading action, shortly after earnings are released. This
maybe just the right time to day trade these stocks, while they have the markets
attention and trading momentum.
The key to successful Earning Season trading is to use
extreme caution. Any positions taken, should be small. Unless you are trading
after earnings for a stock are released, no trade should be an attempt to set it
and forget it. Never overlook an open position. News and additional earnings
released may have an adverse affect on other stocks, namely the one you decide
to take a position in.
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