There are swarms of new traders hoping to find overnight success in the stock market right now.
Traders like Anubhav G., who joined in on the GameStop frenzy. According to The Wall Street Journal, he turned $500 into over $200,000 in less than three weeks during the stocks meteoric rise.
But for every trader like him, there are plenty more who lost lots of money, too.
The news outlet also reported that Salvador V. took out a $20,000 loan to purchase the stock at the height of its buzz. But not long after, the hype finally crashed and GameStop plunged 80%.
So, he learned the hard way what many of these new traders dont realize: The chances of hitting a big payout by following a spectacle are no better than pushing your chips in at the roulette table.
And right now, the next hot topic traders are focusing on is earnings.
Four times a year, U.S.-listed companies report their earnings results. After these quarterly announcements, stocks tend to have some of their wildest price moves double- or triple-digit gains in a single day.
But unlike most traders these days, Im not one to gamble wildly with my money. And neither should you.
Thats why I take a smarter approach to trading earnings one where the odds swing away from Wall Street and back to Main Street.
And today, I want to show you how simple it is
Many individual traders are looking to get rich quick. They make the mistake of trying to predict the overnight price moves in stocks based on their earnings announcements.
If you play the game this way, youre doing exactly what Wall Street wants and throwing your money away at the thought of getting rich in a day.
But again, I dont gamble on the spectacle of the event. I want to help you find consistent profit opportunities to grow your account over time.
Thats why I flipped the approach to earnings announcements upside down.
Over the past four years, Ive worked on perfecting a tested phenomenon that can outperform the stock market.
I found it by compiling a massive spreadsheet that lists every S&P 500 companys earnings announcement going back to 2006.
Four times a year. Five hundred companies. Twenty-eight thousand data points.
Now, it wasnt easy. I devoted over $1 million and more than 12,000 hours into this research.
Thats how I found the post-earnings drift. Basically, it shows that stocks experience a directional drift well after their earnings announcements.
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