If you traded reporting season, you’re probably exhausted by now.
It’s pretty much the most hectic trading period of the year for many traders. You sit down in the morning and half the market feels like it’s in play. Results are everywhere, plus there is the growing list of Day 2+ set ups to deal with. 

We’re seeing a whole new world in how far stocks can gap and then drive (or reverse) during the session … ranges that just didn’t exist two or three years ago. After the first week or so, it becomes almost impossible to keep tabs on everything. These wild moves can provide fantastic opportunities, but also considerable risk.
One thing worth keeping in mind is that having more opportunities doesn’t mean you should be trading more. If anything, it’s probably the time when I have to remind myself to be more selective, more focused and a little more patient.

For me, I’m finding much of that patience needs to be applied near open. Books are often thin and volatile and a lot can change as institutional orders and algos work their way into the market over the first 15–30 minutes. The market you see on the open can be completely different half an hour later.

We’ve seen plenty of that this reporting season. Sometimes it takes a good hour for a clear direction to emerge. Sometimes there simply isn’t one on day one.

This environment makes it very easy to feel like you have to be involved. I’m absolutely guilty of that and have been for most of my career. If you don’t take the trade, you might start thinking about what you’re missing out on. But you don’t have to trade every result. You don’t even have to trade every good setup.
Focus on the ones that make the most sense to you, offer the best potential risk/reward and, most importantly, suit the way you trade.

One of the things I’ve learned over the last 25 years is that sometimes the best thing you can do is wait — and waiting certainly doesn’t come naturally to me. The best trade might not even be on day one. It might be the follow-through trade tomorrow or several days later.

A trader I have huge respect for once said to me, “Taking no position is a position.”

Still one of my favourite trading quotes.

Cheers,

Alan
Traders Edge
Trade independently. Grow Together.
www.tradersedge.com.au