dani face dani quote

Such Thing As Too Much Action?

Hey 5-Star Trader,

Over the past few weeks, I’ve written about the market moves of earnings season (you can catch my latest article on Roku here). These opportunities are unique because they are calendar-based, which often need to be timed within a certain week of each quarter.

With all the juicy action that’s being passed around on silver platters, it can be easy to dive in head first, but I implore you to study the overall account risk you’re willing to take on with such trades. With every contract that is bought, we take on a certain amount of risk and even the best traders don’t sport a 100% win rate. So this begs the question… How do we maximize earnings opportunities while mitigating risk?


Here is how I spread my risk through earnings season…

  1. Paying attention to expirations.
    I recommended not having all your trades expire in the same week. For example, an appropriate way to handle trades could mean you have some overnight trades, some expiring next week, and some the week after. They should never all be expiring within the same week.

  2. Not being afraid to hop in and out of a trade.
    I like to continually get into trades, and continually get out of trades, on a rolling basis over the course of the quarter. Holding them for too long can get volatile leading up to or right after the report. Instead, if I see a chance to take profits, I generally take it and then on to the next trade.

  3. Understanding how Facebook, Alphabet, Amazon, Apple, and Netflix (FAANG) reports are crucial.
    I urge traders to be especially careful during the week of FAANG earnings. This is often when the indexes are trading at their highest and the market is ripe with volatility. By the time this week rolls around, you should try to be out of all your prior “run into earnings” trades.

  4. Knowing who is reporting.
    Be cautious of what sectors are reporting vs. what you’re holding. The results of a company’s report could affect your earnings trades or the overall market even if they are not for the same company as your holdings.

Earnings trades can be volatile, but they are also extremely lucrative so if you know how to mitigate your risk, there is opportunity to take advantage of this action every quarter!

For more earnings season education, take my class, “Quarterly Profits Formula.” There I teach you the setups of earnings trades, along with market behavior during this volatile time.

Leave a Comment

Up Next...

Inflation Not To Blame For Market Pullback…

Hey 5-Star Trader, May is seasonally a weak month for the market and the media likes to blame different things for its poor performance. Lately, they’ve named the fear of inflation as the latest culprit. Yes, there are some legitimate fears of inflation, especially with the excess money printing thanks to several stimulus checks, but there … Read more

Read More

Entering Final ‘Run into Earnings’ Wave…

Hey 5-Star Trader, “Tuesday Trade” Journal: One of the most important concepts in trading is to review your work, and learn from the good and the bad. Identifying what is working is critical — to do more of it. So, to lead by example, each Tuesday, you’ll get a trade from my trading journal, in … Read more

Read More

Don’t Count Out ‘Average’ Retail Traders

Hey 5-Star Trader, Recently, Dogecoin has been making headlines as its value continues to spike, leaving Wall Street in awe. Are we on the cusp of a trading revolution? Is history repeating itself? At the beginning of this year, we saw a major market shift in favor of Gamestop (GME). Previously, it was a dying … Read more

Read More

Subscribe Today!

Want to walk the path to trading success together? Join Danielle’s “Five Star Trader” E-Letter for market insights, tips, tricks, and special bonuses.

Sign Up Now

Free Downloads

Squeeze Checklist

When you find a squeeze, check these boxes to see if you’re looking at a higher probability bet.

Risk Checklist

Before we can make money we must define the rules that define our risk parameters.

High Probability Plays in a Directional Market

Download Danielle's free eBook

10 Steps to Becoming a Successful Trader

Commit to becoming a successful Trader

Strategy Selection Risk Gauge

Danielle focuses on creating a constant stream of income through the selection of trend-following, directional plays.

Upcoming Appearances

Check Back for Upcoming Dates