Courtesy of David at All About Trends
(Reminder: David is available for questions from members in the comment section!)
Yesterday we talked about the "You have to be out of your mind and you love chasing stocks after they already ran moment" of NFLX.
Below is one of the charts we showed in the short term one minute time frequency.
Here is what it looks like today
The point we want to make is never, never, never chase stocks. Never get sucked into upgrades AFTER a stock has already ran. And above all KEEP YOUR EMOTIONS IN CHECK! Not getting sucked into the hoopla and managing your emotions kept you out yesterday and rightfully so.
A few days back we even talked about CMG AFTER its earnings announcement.
See what it looks like now? Sure enough ever since the pop it’s gone nowhere.
Check out the chart of SRCL
What’s this say about LLNW today.
So what is our point to all this? In this climate don’t even bother to buy stocks right AFTER they pop on earnings. This is also how the average investor gets sucked into the market by the way.
We’ve all heard the phrase "No risk No Reward" right? So guess who in these instances gets paid. The person who took the risk knowing full well the end result could be a loss. Care to guess how he gets paid?
Simple, he sells to the person who is hopped up on emotional energy drinks and wasn’t willing to take the risk ahead of earnings. After all why did that person take the trade ahead of earnings in the first place? To get paid in the event it pops on the announcement right?
Still though for us? 50/50 odds are horrible and we don’t like to trade ahead of earnings too much. We can’t stress that enough. All we are doing here is laying out the mechanics of the events and in so doing it allows you to be better aware and make more knowledgeable decisions.
