In a recent interview with CNBC, Jack Bogle – the former CEO and founder of Vanguard Group – admitted he had "never seen a market this volatile in 66 years."
On top of this, we've got earnings season to contend with, which could send the markets soaring or crashing…
And when the uncertainty is high, I know it's easy to be tempted to sit on the sidelines entirely.
But when you pull yourself out of the game due to unstable markets, you may be safe, but you miss huge profit opportunities, too.
So, I'm going to reveal to you exactly how to trade through earnings – even in one of the most volatile markets we've seen.
And it's easier than you think…
On April 6, analysts reported that 53 companies in the S&P 500 have reported positive earnings per share (EPS) guidance. The typical average for companies reporting positive EPS guidance is 28.
And industry analysts are also predicting a 16% increase in the S&P 500 over the next 12 months.
But regardless of the positive outlook – we all know earnings can be intimidating, especially to new traders. So I want to give you these easy steps that will not only help you turn a profit, but will also give you peace of mind.
You see, when it comes to volatility, an important concept to remember is risk and trade management.
I always teach my students how to establish how much capital per trade they feel comfortable with risking.
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For example, let's say a new options trader has an account funded with $25,000 and note that they only wish to risk 2% of their option account per trade. This would mean the investor would spend $500 or less on each trade.
During such volatile times, this is a safe approach and helps protect you as an investor from risking too much capital.
So you may be wondering, how exactly do you trade around earnings without facing the risk of a completely unexpected outcome?
About the Author
Tom Gentile is one of the world's foremost authorities on stock, futures and options trading.
With more than 25 years' experience trading stocks, futures, and options, Tom's style of trading systems and strategies are designed to help individual investors propel themselves past 99 percent of the trading crowd.