Traders who want to trade direction wait for the earnings season to make money trading stocks that open gap up or down.
Usually when a stock gaps up or down they continue the trend for quite some time. Traders want to trade that direction either through equities, futures or options.
One of the best ways to trade earning season is to trade gap up or down. To do that a trader must enter the trade one day before the stock’s earnings are out to take benefit or gap up or down.
There are some stocks with a history or opening after the result season with a huge gap or down.
In this article I will teach you how to find the right earnings gap up or down stocks.
This is the step by step guide.
Note: There is a chance that traders take a wrong direction is futures and suffer heavily once the stocks gaps up/down in another direction. In my future and option course you will learn a future with option hedging strategy where even if you are wrong in future direction you will end up making money. The course not only teaches conservative options strategies but future hedging strategies as well.
Almost all stocks report quarterly earnings so how to select the best stocks for trading that can explode?
Here are some guidelines to find the stocks to trade in the earning season.
1. Daily Volatility & Liquidity are Important
You can get a daily chart from investing.com. If the stock gaps down or up during earnings season historically its worth trading. My Futures and Option course has a good aggressive volatile non-directional strategy for future traders. You can do the course and trade the directional strategy in these kinds of stocks to make money during earnings season.
You must also make sure that the stock has good liquidity else you may be able to get in but find it difficult to get out of a trade.
As soon as you see a profit you must be able to get out.
Once you find these stocks just keep a watch on them and trade them on earnings season.
2. Market Forecasts are Not Wrong
Usually before quarterly report you will find many online business website like MoneyControl write what the market experts expect results from a company. They may not be exactly right but they are right in their approx projections. If quarterly results projection forecast is good, go for long, else go for short. Most of the times you will be right. But make sure you hedge your position. If you are wrong even once you may lose what you earned in last 7-8 trades. You will learn good hedging techniques in my course.
3. Stock’s Daily Range Is Important
Some stocks move 1% a day but some move average of 3%. More move means more money. These kinds of stocks you should trade not the low move stocks. Stocks that move 3-4% average daily will surly move 9-10% during earnings season. Trade them you will make more.
4. Trade Small Floating Stocks
Float is the number of shares available for trading of a particular stock. Floating stocks are stocks that retail investors can trade not the one that are held by the management or by the owners.
Opposite of Floating Stocks is Closely-held Stocks. Closely-held Stocks are owned by insiders, major shareholders (management) and employees.
A stock with a small float will generally be more volatile than a stock with a large float. They will have small liquidity and wider bid-ask spread. However during earning season these stocks will find good liquidity.
Low float stocks will move big during earning result day. They will most probably break their usual support and resistance levels.
5. Wait for the Right Setup
Once you find the right stock to trade chances are that it may have already factored in the market experts view in their pricing, but they will not try to break the support and resistance levels. Once the result is out they will do. So do not worry about small volatility before the earning day, as this is natural. One day before its result will come out you can take the position in the direction with a hedge market pundits are predicting.
What You Can Do Now?
If you are an aggressive Future trader you can do my course to learn how to hedge Futures with Options to make sure the losses are limited and profits are unlimited in correct way. After learning the strategy you will not fear trading futures as you will know if wrong your losses will not be unlimited. Fees can be paid here.
You Can Read More On My Site
What you should do now1. If you have still not subscribed for my free 5 days course you can do by filling the form above. You will learn a lot about option trading.
2. If you are a new option trader, not much experienced and are making losses you can do my paid course. I recommend Nifty Conservative Option Course for beginners because it is easy to understand and easy to trade. Even a 18 year old young trader or a housewife can learn it and start trading from next day. It will help you to earn consistent monthly income without any software or speculation or stress or big risk. You will learn proper hedging strategies that works in any market condition.
3. If you are banknifty weekly options trader you can do my Bank Nifty Weekly Options & Futures Strategy Course. You will learn future and option hedging strategies that works in volatile market condition.
TestimonialsWhat Traders Say About My Course
Course fees: Click here to know the course fees.
Here is complete process of my course1. Once you pay I will send you the course materials for studying to your email.
2. You read and ask me questions via phone/whatsapp/email to clear doubts.
3. Then you start paper trading and still can ask me questions.
4. After about one month you can start trading.
5. Since doubts can come anytime the support will be there for one year.
Within one month you can start trading on your own. No need to depend on anyone once you are on your own.
If you have any question you can contact me.
You can read about me here and my trading mistakes here.
Dilip Shaw, Founder
INCOME DISCLAIMER: Any references in this site of income made by the traders are given to me by them either through Email or WhatsApp as a Thank You message. However every trade depends on the trader and his level of risk taking capability, knowledge and experience. Moreover stock market investments and trading are subject to market risks. Therefore there is no guarantee that everyone will achieve the same or similar results. My aim is to make you a better & disciplined trader with the stock trading and investing education and strategies you get from this website. Please note that I DO NOT give tips or advisory services by SMS, Email, or WhatsApp or any other form of social media. I strictly adhere to laws of my country. I only offer education on finance, investments on stock markets in the best possible way as much as I can through this website. Still, you must consult an authorized advisor or do thorough research before investing in any stock or derivative before trading any strategy given in this website. I am not responsible for any investment decision you take after reading any article given in this website. Knowledge is the only way to get success in stock markets. I try my best to give stock market investing and trading knowledge through the articles posted in this website. Thanks for visiting my website.