Corporate earnings can’t be as lucrative as you think. Sometimes, we have reasons to avoid share trading during result announcements. You should never make a position forcefully or just because of herd mentality.
Your positions in stock markets can’t be fruitful always. There can be situations when even the most experienced traders or investors likes to stay away from trading.
If you are making positions in the wrong direction then it can quickly result in huge losses. It will be wise decision to make positions only when you have reasons in support of your step.
Sometimes, it is also best strategy to avoid share trading. Here are 15 reasons to stay away from stocks during quarterly earnings season:
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(1) Stock May Fall On Good Earnings & Rise On Poor Earnings
It is one of the most authentic reasons to avoid share trading during result announcements. Earnings season is always full of surprises. It happens not only in terms of positive or negative numbers. But, it also surprises in terms of direction of stock movement.
As a general rule of trading, stocks should rise for positive results while fall on negative results. Most of us also think of the same movements after results.
But, if a stock falls on good earnings report or rise on poor or bad earnings reports can really shock you. It happens typically when markets tries to fool investors.
In such situation, share trading becomes a form of gambling. Therefore, in order to remain on safer side, traders may opt to stay away from trading.
- Share Trading During Result Announcements: Shutterstock