Earnings Season

[jpennybags 11]

Let me begin with the statement… "I hate earnings season". My loss percentage always spikes, and the winners aren't all that great… it's been a break even proposition for me. The best strategy I've found to date has been to take the first two weeks off… close the books, and find something else to do. This works well for me, as I enjoy getting away; recharge the batteries, allow some "head" maintenance to occur… it's a good thing. As stated earlier, it has been a break even proposition for me… so why bother.

 

4 times a year at 2 weeks adds up to 8 weeks (of course)… I don't really need that much time off, or that much maintenance. The reason that I feel I should bother, is simple… I'd like to cut that 8 weeks down to 4.

 

Earnings are coming up shortly. In reviewing my trades from past ES time frames, I get stopped out more often. My position sells off due to another company in the same sector reporting something in the conference call that the market doesn't like. Or some other reason… too many balls in the air, and too much information in the markets.

 

I thought of just taking day trades, but I'm not really a day trader (day trading has been profitable for me, but I don't like being tied to the screen all day). I've had some limited success with increasing my stop margin, and decreasing position size.

 

Anyone else had the same problem with ES… I'm ES challenged… looking for suggestions.

[Tams 20]

volatility = profit potential

[SIUYA 11]

i hate earnings seasons also (trading Australian stocks).....there are quite a few people I know in the same boat. They take the time off, or if they are fundamentally based spend time seeing companies, researching etc.

Do i have a solution....no. I usually just sit and wait, sometimes there are opps, othertimes the gaps hurt.....as too much depends on market expectations, market context and the like.

Plus....how do you explain those stocks that take three days of going down to digest a good result (or seemingly so) and then gap up on day 4 to go over the highs of the last three days.

[TheNegotiator 13]

I would say you need to write down a new set of risk parameters and possibly strategy altogether for this period. Some methods just tend to not work that well during earnings season or more likely, some traders tend to not work too well.

 

Study your trade data. Write down some separate risk parameters. Be careful in your trade selection. Try it simulated(so long as you have a non-fillontouch sim).