Embracing ‘Fear’ In Earnings Runs


Simpler Trading Team

Apr 14th 2021  .  2 min read

Is earnings season an excuse to throw caution to the wind or is like any other day in trading – risky?

One of the strongest attractions to trading the stock market is the risk involved. Every trade has potential for loss, and potential for gain.

There is a unique, seasonal time span where traders can embrace risk with the potential for profit –  earnings season.

Most traders have read or heard someone promote the thought that earnings are uncertain, unprofitable, and to be avoided at all costs.

Traders on the Simpler team have a different viewpoint based on years of trading experience.  Our traders know how to plan for, track, and follow the next “run into earnings”

Does it make sense for a trader to purposely wade into earnings season when so many others run away?

Simpler’s traders will let their past successes speak on their behalf. Not every earnings play is a winner, but this seasonal trading pattern has proven to yield key opportunities.

Earnings season – when companies relay quarterly filings through a combination of press releases, SEC filings, and earnings calls – is predictable (every quarter), has a history for every ticker (pricing and performance for all past quarters), and it can be traded with a plan (Simpler’s traders can follow which signals and indicators offer potential).

Earnings trades aren’t “plug and play.” Traders need to understand all risk associated with these trades, how earnings setups are different from other plays, and they must have a willingness to lose whatever they put into the trade. (Sound familiar? This is the basis for the “Simpler way” of trading daily.)

Earnings season presents an opportunity to target some of the big-name stocks while not overlooking day-to-day tickers. Some of the “non-marquee” tickers can present profitable potential.

Earnings season for the first quarter has kicked off. Did you miss the action?

Because companies report at different times throughout the year, traders can still target earnings events.

Earnings reports, while mostly on a quarterly schedule, can be an almost daily rollout of statements from a variety of companies.

We Saw: Mostly quiet day with mixed results – 

  • Nasdaq struggled on tech news
  • Earnings season heating up
  • Fed worries about cyber crime

We’re Watching: Depth, breadth of pullback signals –

  • Banks reveal earnings after rough quarter
  • Hints of higher consumer prices due to inflation
  • Setups in: PLAY, RBLX, GOOGL, WDAY, ETSY