I received an email today from one of our trader/trainees. He was doing some prep work for earnings season and was interested in some feedback. Earnings season is the playoffs for professional traders. Each quarter during this period we are afforded additional trading opportunities with great risk/reward. It is essential that we are performing optimally during this time in order to reach our performance goals.

My feedback to the youngster is in blue plus a few links to posts that may come in handy for traders during this earnings season.

During trading hours:
1. Set many alerts. I would recommend doing this every day
2. Make sure I am choosing stocks that are most in play, have volume, and have good technical setups. i would recommend doing this every day
3. Make sure I follow through in the afternoon with stocks I traded/looked at earlier.
i would recommend doing this every day
4. Check back with stocks that did not have the best setups in my morning prep but may have developed into better setups for the close. i would recommend doing this every day
5. Look at stocks that are finished with the conference call to see what setup that may have caused. good idea

After the close:
1. Write down stocks that had earnings and are setting up nicely for a follow through move over the next few days and write down prices where the stock was accumulated and which it would be good to get involved at later on. good idea
2. Look at stocks with earnings after the close and make a list to look at before the open to see where they are trading in the premarket once people have gotten involved in the stock. observe both after market and pre-market activity to get a sense of where big buyers/sellers are getting involved.

Before the open:
1. Look at my list from stocks with earnings after the prior days close and select the ones that are setting up best in terms of technical setup and volume. i would also add that you should focus on a stock that is at your trading skill level
2. Look at stocks with earnings before the open and make a list of those that have the best technical setup to go along with the fresh news. I need to write down the conference call on each of these stocks to make sure that I do not trade stocks during the call. makes sense. you can trade a stock during a call if you are listening and especially mindful during the Q&A. but this should really be decided on a case-by-case basis.
3. Look at stocks that I have traded over the last 2-3 days to see if they are ready for another move. i would recommend doing this every day
4. Look at the stocks that made most of their move in premarket a few days ago and maybe they are ready for an intraday move today. this is a very good idea. quite often stocks will have their best moves prmkt and be ready to go intraday again on the second day. i have seen both AAPL and GS do this in the past year after good reports.
5. If certain sectors are particularly in play because of earnings news on a certain stock, then look at other stocks in the same sector as well. This can be helpful in terms of finding a stock that is less crowded. certainly both KLAC and NVLS offered great opportunity after INTC reported they were bumping up Cap Ex in a big way.
6. Look at the morning ideas sheet to see what other people have found; post my ideas on the sheet. always good idea to see what others are posting. you may have overlooked a good opportunity and you cal also get a sense if a lot of people are so focused on one idea that perhaps it will be too crowded on Day 1. If a stock is too crowded it may not trade cleanly. Buyers may appear to win but it doesn’t trade higher. Sellers may appear to win but it doesn’t trade lower.

Some blog posts to review…

http://www.smbtraining.com/blog/overthinking-yourself-to-underperformance
http://www.smbtraining.com/blog/the-opening-drive
http://www.smbtraining.com/blog/spreading-yourself-too-thin
http://www.smbtraining.com/blog/the-money-trade