Avoiding Earnings Reports
When swing trading, we want to avoid trading into an earnings report. Since we don’t know what the effect of that report will be, we are introducing an unknown element into our analysis if we allow trades to run into earnings.
Unexpected earnings numbers or revised forecasts result in gaps. There are some traders that like to roll the dice and hope that the gaps move in their favor. These traders are basically foolish. If they want to gamble, they should take a trip to Vegas. Good traders know that protecting their equity is the most important aspect of trading. They want to avoid as much risk as possible. Trading into an earnings report is taking on unnecessary risk.
The following video is an excerpt from Video 5 of the Ultimate Swing Trading Method DELUXE EDITION. To learn more, visit our product page.