I have stated over and over that I run tried and true systems that have been fully back tested, forward tested, and then run with real $’s based on a set of rules. By following rules, I am able to overcome both positive and negative psychology that is associated with strings of wins or losses.
A win/loss ratio of 68% means that out of 100 trades, I will lose 32. Unfortunately, I don’t know where those losses will occur. A traders psychology is ALWAYS affected positively if those losses are interspersed evenly across those 100 trades (and is actually dangerous as it is too easy to think you are invincible when things are chugging along and your account continues to go up, up, up.) A traders psychology is ALWAYS affected negatively if strings of 5, 6, 7, etc… losses occur. It is too easy to say this ER season is different - the market is going down, the Fed is raising rates, goats are meowing, or it started to snow in Malaysia.
Last week was a tough week with a couple of bad days with outsized losses. BUT… the win/loss ratio of all opportunities (provided to premium readers at the following post: Week 2 : Fall 2022 ER Season) was 60%, which is lower than the long term 68% average.
We have good weeks; we have bad weeks. We can only own the results (and bank profit in our accounts) if we don’t get emotional based on a couple of bad days, which bring down the results.
Here are each of the trade summaries as I personally played them:
AMD (No fill, but several readers played so it is noted here)
MAR (No play as $ risk was over $300)
This coming week is a lighter week - the planned ER plays are below the paywall. Also - I’m excited that Substack has a chat function. I have been developing a new and fairly simple system for long and short entries one to two weeks prior to a stock’s ER. I’ll be sharing the entry and exit rules in the chat. My hope is that premium members pony up some ideas surrounding the rules. Note - chat is only available via the substack app…
Earnings IC’s for Week of Nov 7 - 11
Tuesday, November 8th
DHI (ER is BMO on the 9th) - 4 successes out of last 4 ER’s
DIS (ER is AMC on the 8th) - 3 successes out of last 4 ER’s
Wednesday, November 9th
WYNN (ER is AMC on the 9th) - 4 successes out of last 4 ER’s
Watchlist (based on system proposed in chat)
SPLK (ER is AMC on Wednesday, November 30th. The
DHI looks good. DIS not so. You in on WYNN?
DIS (89/90/108/109) and DHI (67/68/78/79) are on deck.