Being someone new to trading and watching a lot of Tim's videos, I always hear about earnings winners. I've definitely had success with them on my paper trading account and I love the strategy. But he mentions that it isn't about the numbers themselves, but the reactions to earnings. Has anyone ever done the same sort of thing with earnings losers? I've found some stocks such as $GEOS last week that have consistently shown terrible reactions to earnings every single time in the past year. Ended up shorting it in the morning and banking a tonne. Does anyone else use this strategy and does it work for you in the same way that earnings winners do? (I'm still a noob and haven't watched any dvd's yet but plan to soon so don't hate please)
@TheStig I would recommend waiting to either buy or short until the first mint move has happened, for example an earning loser might dip a little bit and come back quickly, then start to go down, so I would only short on that side of the move. Make sure no matter if your going short or long just catch the meat of the move, nothing more nothing less
Of course I still wait to see where it goes and trade cautiously just like any other trade. Luckily I've already been burned a couple times and have learned my lesson.
The thing about that is an earnings loser could still be am earnings winner if they beat but still lose revenue. All about the reaction.
Shorting earnings losers is a good strategy and it works for me - I just need to fix my overtrading. How it works for me would make up for an article than a quick response but as mentioned above wait for confirmation, eliminate pre-market low floaters and go for biggest pre-market losers at market open (5% or more gap down works best).
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