Every financial quarter as traders we have our Super Bowl- Earnings Season. These are exciting trading times!
New traders chirp, “This is going to be the month I break out.”
Developing traders announce,”I am not going to be a wuss during this earnings season and quintuple my profits!”
Experienced traders unsatisfied with their results during earnings season declare, “I will crush it this earnings season!”
Retail traders shout, “I am going to make so much I can quit my job!”
I am all for thinking positively, but those thoughts alone will not produce improved performance.
What will? What is the only thing that will? Improving your skills and trading edge. Specifically improving your skills and trading edge in these aspects of your trading:
1) Stock Selection
2) PlayBook of trades with edge
3) Process
4) Preparation
Better performance requires trading the best stocks. In One Good Trade, I wrote, “You are only as good as the stocks you trade!” On our desk that means trading the Stocks In Play. These offer the most opportunity during earnings season. You must be in the Right Stocks!
Better performance also entails trading Stocks In Play with your PlayBook of trades with edge. And an edge that you can measure from your trading results. Setups that offer the best risk/reward. Setups like the Trend Trend Changing Fundamentals Trade, which I drill into our newbs. Trades that offer the greatest margin or error, best risk/reward, least amount of trade decisions, and tend cleanly in one direction. You must be in the Right Setups!
Better performance also requires an elite trading process. If you know what stocks to trade and how to trade them but are not prepared for them you will underperform. Are you preparing properly so you find the best stocks to trade? Are you reviewing your work so you are biggest in your A+ trades? Do you have a system to determine your favorite trades? Do you have a trading strategy that helps you determine what trades deserve bigger size? You must have the Right Trading Process!
And all of this must be done before Earnings Season. Stock selection skill, PlayBook of trades with edge, trading process skill must be developed before Earnings Season begins to improve your trading results.
At SMB we say Right Stocks AND Right Setups AND Right Trading Process! Be prepared to maximize the opportunities during our Super Bowl of trading- Earnings Season.
You win the game before its played with skill and edge!
“You can be better tomorrow than you are today!”
Mike Bellafiore is the Co-Founder of SMB Capital and SMBU, which provides trading education in stocks, options, forex and futures. Bella is the author of One Good Trade and The PlayBook. He welcomes your trading questions at [email protected].
*no relevant positions