Earnings Season Trading Strategy
Master trading around earnings reports using Ape AI's analysis and strategic preparation.
⏱️ Time: 30-60 minutes per earnings play 💰 Risk Level: High (binary events) 📱 Platform: iOS & Web 👤 Best for: Experienced traders comfortable with volatility 🦍 Recommended Companion: Maverick (momentum/catalyst focus)
What You'll Learn
How to prepare for earnings season
How to identify earnings opportunities
How to analyze earnings reports quickly
How to trade the post-earnings move
How to manage earnings risk
Understanding Earnings Trading
What is Earnings Season?
Quarterly cycle:
Q1 Earnings: April-May
Q2 Earnings: July-August
Q3 Earnings: October-November
Q4 Earnings: January-February
Peak weeks:
2-3 week period when most companies report
500+ companies reporting per week
High volatility environment
Outsized moves (±10-20% common)
Why Earnings Matter
Quarterly earnings reports include:
Revenue (sales)
EPS (earnings per share)
Forward guidance
Business updates
Q&A with analysts
Stock reactions:
Beat expectations → Usually up ✅
Miss expectations → Usually down ❌
Beat but guide lower → Often down ⚠️
Miss but guide higher → Sometimes up 🤔
But it's not always logical!
Market expectations > actual numbers
Guidance matters more than past quarter
Sector sentiment affects reaction
Technical setup influences move
Before You Start
Prerequisites
✅ Trading Experience
6+ months stock trading experience
Comfortable with high volatility
Understand options (if trading them)
Fast decision making ability
✅ Account Requirements
Minimum $10,000 account
Ability to trade pre-market/after-hours
Fast execution broker
Margin approved (optional)
✅ Knowledge
Understand P/E ratios and EPS
Know how to read earnings reports
Familiar with guidance
Comfortable with binary risk
✅ Risk Management
Risk only 1-2% per earnings play
Max 2-3 earnings trades at once
Comfortable with 100% loss (options)
Have clear exit plan
What You Need
Earnings calendar
Access to earnings calls
Quick news feeds
Ability to act fast
Earnings Trading Strategies
Strategy #1: Avoid Entirely (Safest)
Best for:
Beginners
Risk-averse traders
Long-term investors
Small accounts
Approach:
Don't hold through earnings
Exit positions 1-2 days before
Wait for post-earnings setup
Reduce volatility exposure
Pros:
✅ No binary risk
✅ Sleep well at night
✅ Avoid unpredictable moves
Cons:
❌ Miss big winners
❌ Less exciting
❌ Fewer opportunities
Strategy #2: Post-Earnings Continuation (Recommended)
Best for:
Intermediate traders
Swing traders
Risk-managed approach
Approach:
Wait for earnings release
Let volatility settle (1-4 hours)
Enter on clear direction
Ride the momentum
Pros:
✅ Clarity on direction
✅ Better risk/reward
✅ Defined setup
✅ Less binary
Cons:
❌ May miss initial move
❌ Requires quick analysis
❌ Early morning/late night
This guide focuses on Strategy #2
Strategy #3: Pre-Earnings Play (Advanced)
Best for:
Experienced traders only
Options traders
High risk tolerance
Approach:
Enter before earnings
Small position size
Accept binary outcome
Have plan for both scenarios
Pros:
✅ Capture full move
✅ Better options pricing (pre-IV)
Cons:
❌ 50/50 gamble
❌ High stress
❌ Can lose 100%
❌ IV crush on options
Step 1: Identify Earnings Opportunities (Week Before)
Build Your Earnings Watchlist
Which companies to watch:
Tier 1: Must-Watch (Always)
AAPL, MSFT, GOOGL, AMZN, META (Mega-cap tech)
NVDA, AMD, TSLA (High beta, big movers)
SPY components having bad/good quarters
Tier 2: Sector Leaders
Leading stocks in hot sectors
Stocks you're already tracking
Companies with upcoming catalysts
High-volume, liquid names
Tier 3: Speculative
Small caps with big moves
Biotech with binary events
Turnaround stories
Contrarian plays
Avoid:
❌ Low volume stocks (< 1M shares/day)
❌ Stocks you don't understand
❌ Penny stocks
❌ Illiquid options (if trading options)
Use Ape AI to Find Opportunities
Ask Maverick:
Maverick's Earnings Preview:
Research Each Company
For your top 3-5 earnings plays:
Ask Sage for fundamental check:
Sage's Earnings Preview:
Step 2: Pre-Earnings Setup (Day Before)
Prepare Your Trade Plan
For each earnings play:
TSLA Example:
Set Up Alerts and Monitoring
Before earnings release:
Set alerts for:
4:00pm: Earnings release time
5:30pm: Earnings call starts
Key price levels (support/resistance)
Prepare to monitor:
Earnings press release (company IR site)
Benzinga/Bloomberg for quick analysis
Ape AI for Maverick's take
StockTwits/Twitter for sentiment
Have ready:
Broker app open
Quick access to place orders
Calculator for position sizing
Journal ready for notes
Step 3: Earnings Release (Real-Time)
Initial Reaction (First 5 Minutes)
When earnings drop (usually 4:00-4:05pm):
1. Check the numbers FAST:
2. Check stock reaction:
After-hours price: $250 (+3.3%)
Volume: Heavy (bullish confirmation)
Trend: Spiking higher
3. Scan guidance quickly:
2025 deliveries: 2.2M (vs 2.0M est) ✅
Margin outlook: Improving ✅
Cybertruck: On track ✅
First 5 min verdict: BEAT, good guidance, bullish reaction
Ask Maverick for Quick Take
Maverick's Instant Analysis:
Listen to Earnings Call (Optional)
5:30pm: Earnings call starts
Focus on:
CEO tone (confident or defensive?)
Guidance details
Analyst questions (concerns?)
Management responses
Watch for:
🚩 Red flags: Lowered guidance, concerns raised, defensive tone
✅ Green flags: Raised guidance, excitement, strong outlook
Ask Maverick for call summary:
After call update:
Step 4: Next Morning Execution (Opening)
Pre-Market Analysis (6:30-9:30am)
Check pre-market action:
7:00am: Pre-market update
Ask Maverick for entry plan:
Maverick's Entry Plan:
Market Open Execution (9:30-10:00am)
9:30am: Market opens
Watch first 15 minutes:
9:45am: Entry opportunity
Scenario: Gap and fade to $250
Post-Entry Management
10:00am: Position established
Journal entry:
Step 5: Managing the Earnings Trade
First 24 Hours
What to watch:
Day 1 (Entry day):
Does it hold the gap?
Is volume supporting the move?
Any analyst upgrades?
Sector following through?
Positive signs:
✅ Closes near highs
✅ Volume stays elevated
✅ Sector strong
✅ No negative news
Warning signs:
⚠️ Fading all day
⚠️ Volume drying up
⚠️ Sector weak
⚠️ Negative analyst comments
Days 2-5: Position Management
Daily check-in:
Ask Maverick:
Day 3 Update:
Exiting the Trade
Scenario A: Hit Target 1 ($260)
Scenario B: Hit Stop ($246)
Common Earnings Scenarios
Scenario 1: Beat But Stock Drops
What happened:
Company beats earnings
Guidance is weak
Stock drops 5% anyway
Why:
Guidance > past results
High expectations not met
"Sell the news" after run-up
Sector weakness
What to do:
✅ Avoid or go short
❌ Don't fight the tape
❌ Don't average down
Learning:
Price action > Fundamentals
Market forward-looking
Respect the move
Scenario 2: Miss But Stock Rallies
What happened:
Company misses earnings
Stock up 3% next day
Why:
Miss was expected (priced in)
Guidance was raised
Sector momentum strong
Short squeeze
What to do:
✅ Can still trade long if setup good
✅ Watch for follow-through
⚠️ Be cautious (can reverse)
Scenario 3: Huge Gap (±15%+)
What happened:
Massive earnings surprise
Stock gaps 15%+ overnight
Why:
Major guidance change
Unexpected catalyst
Sector-wide implications
What to do:
⚠️ Don't chase immediately
⚠️ Wait for consolidation
✅ Enter on pullback
✅ Or wait for breakout from consolidation
Risk:
Mean reversion likely
First move might be fake
Better entry will come
Earnings Season Calendar Strategy
Peak Weeks Approach
Week 1-2 of Earnings Season:
Market testing waters
Early reports set tone
Moderate volatility
Strategy:
Selective plays
Smaller size
Test the environment
Week 3-4 (Peak):
300-500 reports per week
Highest volatility
Most opportunities
Strategy:
Most active
Full position sizing
Best setups
Week 5-6 (Tail End):
Stragglers reporting
Volatility fading
Fewer opportunities
Strategy:
Wind down
Cherry-pick only
Smaller size again
Sector Rotation During Earnings
Watch sector leadership:
Early Earnings:
Financials (JPM, BAC, GS)
Set tone for risk appetite
Mid Earnings:
Tech mega-caps (AAPL, MSFT, GOOGL, etc.)
Drive market direction
Late Earnings:
Retail (WMT, TGT, AMZN)
Consumer health check
Strategy:
Follow the leadership
Weak sector = avoid
Strong sector = focus
Risk Management for Earnings
Position Sizing
Reduce size for earnings trades:
Example:
Maximum Exposure
Limit total earnings exposure:
Why:
Correlated moves (tech all moves together)
Multiple binary events
Can't manage too many
Preserve capital
Stop Losses Are Mandatory
Always use stops on earnings trades:
Technical stop:
Below gap fill level
Below key support
Below recent low
Percentage stop:
2-3% from entry (tight)
Wider if large gap up
Time stop:
Exit if no progress in 3-5 days
Don't let winner become loser
Move on to next opportunity
Tools and Resources
Earnings Calendars
Free Resources:
Earnings Whispers (earnings calendar)
Yahoo Finance (earnings dates)
Investing.com (earnings calendar)
Your broker (usually has calendar)
Ape AI:
Real-Time Earnings Data
News Sources:
Benzinga Pro (paid, fast)
Bloomberg Terminal (paid, pro)
Twitter/X (free, follow @EarningsWhisper)
Company investor relations site (official)
Analysis Tools
Ape AI:
Maverick for quick takes
Sage for fundamental preview
"Why Pop or Drop" for catalysts
"Bagholder Risks" for what to watch
External:
SeekingAlpha (transcripts)
Koyfin (earnings data)
TradingView (charts)
What's Next?
Master Earnings Trading
Related Workflows:
First Options Trade → (earnings plays with options)
Advanced Skills:
Ask Maverick
Success Checklist
✅ I research earnings BEFORE the report
✅ I have a plan for both beat and miss scenarios
✅ I wait for post-earnings clarity (no guessing)
✅ I use smaller position sizes (1-1.5% risk)
✅ I set stops immediately after entry
✅ I don't chase huge gaps
✅ I take partial profits at targets
✅ I limit earnings exposure to 2-3 positions max
✅ I journal every earnings trade
✅ I respect price action over fundamentals
Remember: Earnings are binary events. You can do perfect analysis and still be wrong. The key is position sizing, having a plan, and respecting price action. Don't gamble—trade with an edge. 📊
Wait for clarity. Enter with conviction. Exit with discipline.
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