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
Hi, I am Dilip Shaw, owner of this website. I am a trader like you. I have been trading since 2007, but lost a lot of money till 2010. I then stopped trading and studied options like college exams. Started trading again from 2011 and never looked back since. I did a lot of research, read books and did countless paper-trading before being profitable. You can read about me here.
My conservative trading course since 2014 is helping many retail traders just like you who have a job or business make consistent profits like this:
What Traders Say About This Course
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One Of My Client Is Making Rs.25k Per Week
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You can do this course from your home. Some traders make amazing profits like Rs. 16.26 lakhs profit in 5 days though results may differ for all.
This course helps you learn to trade conservative option strategies for monthly income. Once you finish the course you can start trading immediately. You can start trading from any day. No need to wait for expiry. You will make profits consistently.
This course is good if you have a regular job or business. You DO NOT NEED to monitor your trades every second.
What You Get?
Before reading please understand that for all 5 strategies, strike selection will be taught. Strike selection while trading Options is the most essential part to succeed.
You get two conservative non-directional strategies on options, one conservative stock option strategy and two conservative directional strategies on Future & Option combination.
Non directional trades are profitable 80% of the times and make 3-5% per trade (Results may vary).
Directional strategy makes money fast. It does not matter which side the stock moves. In fact you make more when you are wrong in the Future trade. 🙂 Some amazing profits possible here.
The stock option trade makes 30,000 in one trade and if SL is hit there is a way to recover losses plus make 30k in that trade.
Technical knowledge is NOT required. No need to monitor trades every second.
In the course you will learn how to select the strike prices. You learn when to trade, which strikes to sell which to buy, how much profit target you should be looking for, the best place to take stop loss and what to do after taking stop loss – means how to get that money back. The success rate is more than 80%.
Since trades are properly hedged there is no stress in trading my strategies.
I am very confident that you will make money trading my strategies. To help you succeed I offer few months support for FREE.
11 Reasons Why You Should Do The Course:
1. TA Knowledge NOT required
2. NO Software Required
3. Regular Monitoring NOT Required
4. Continue with Your Job
5. Do Course From Your Home
6. 100% Hedged
7. Stress-Free Trading
8. Not too much money needed to trade
9. Scaling Possible
10. One Time Fee
11. FREE Support For Months
To know more Call/SMS/WhatsApp me on 9051143004 or email me now. I know English and Hindi.
Read the details of the course here.
If you want to enroll for the course you can do so here.
P.S: So many years of trading has thought me one thing - it is always better to make small profits month after month, rather than lose money month after month trying to make too much money. It never happens. But small money accumulated month after month can become very big in only a few years.
WhatsApp or Call me: 9051143004
If you have any question you can contact me.
You can read about me here and my trading mistakes here.
Dilip Shaw, Founder
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