A common trading mistake

Innervoice

Innervoice

A common trading mistake amongst new traders, even some experienced, is buying knee jerk reactions. Example, an upgrade or earnings news before reading through it.
Ive seen stocks jump 10% only to gradually fall throughout the day or worse, immediately reverse course. Do not buy the knee jerk reactions including economic data. Always have a solid game plan and do not randomly get in and out of stocks, that is not a good strategy.
 
I had such problems a few decades ago.
I don't have such problems.

TSLA earnings release is major news.
When to trade TSLA earnings release?
It was released a few hours ago, during the mid-Asian / Early European session.

1. Trade during the mid-Asian / Early European session?
Obviously, you had to trade the highly liquid US index futures, gold, crude oil futures ...

2. Trade TSLA when the US market opens?
But note that it has already gapped down.
 
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News is overrated as a catalyst for big stock moves. Not saying it does not have an effect but, insiders (banks, brokers, mutual funds, hedge funds) has long taken a position before a stock gaps up or gaps down. So, news for the retail trader is useless. Much better to wait for a retracement or rally at support and resistance areas, much of the traders and big investors and traders will be buying or selling at such areas. Go with the flow, why fight it?
 
Innervoice said:
A common trading mistake amongst new traders, even some experienced, is buying knee jerk reactions. Example, an upgrade or earnings news before reading through it.
Ive seen stocks jump 10% only to gradually fall throughout the day or worse, immediately reverse course. Do not buy the knee jerk reactions including economic data. Always have a solid game plan and do not randomly get in and out of stocks, that is not a good strategy.
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It's not because we are not able to make money out of it that it should be considered as a common trading mistake.
Usually, traders make money when prices are moving.
 
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