For today, let’s step aside from the market action. Instead, please let me share with you the most exciting breakthrough I’ve had in over 30 years of trading the stock market.
It’s an earnings trading algorithm – designed to spot high-probability trades on stocks just before or after they make their quarterly earnings announcements.
The system is NOT a computerized program that backtests a bunch of data and comes up with a hypothetical track record.
Those sorts of programs often cherry-pick the data to make the performance look as good as possible. In my experience, the real results of those systems fall well behind the hypothetical performance.
My system is different.
For the past five years, I’ve spent thousands of hours compiling real-time data, and then logging that data – item by item – into various spreadsheets in order to set the acceptable parameters for the many variables in the algorithm.
One year ago, I started trading with the system. These were real trades with real money, not a bunch of hypothetical examples.
The results were fantastic.
Thirty-two of the trades were profitable. Only three trades lost money. That’s a 91.4% success rate.In one year, the system produced 35 trades. That’s just about nine trades for each earnings season.
The average trade lasted less than two days. And the average return was better than 50%.
A mere $1,000 invested in each of these trades would have generated $17,547 in profits. And, since I never had more than two trades working at any given time, a small $2,000 account would have earned an 877% return over the year.
Like I said… the results were fantastic.
They were so good that I felt confident sharing my earnings trades with subscribers starting last month.
The system uses a variety of strategies depending upon market conditions. When option prices are cheap, it will recommend buying calls or puts. When option prices are expensive, the system will suggest selling uncovered calls and puts.
For example, on May 16, my system alerted me to a trade in Urban Outfitters (URBN) – a beaten-down clothing retailer. The algorithm determined that selling the URBN May $19 uncovered put option was a high-probability trade. The option was expensive, and the stock was unlikely to fall all that much following its earnings announcement.
So I told subscribers to sell the URBN May $19 uncovered put option before URBN announced earnings. We bought the option back the next day, right after the earnings announcement, and recorded a 10% gain on the margin requirement for the position.
That’s not too bad for an overnight trade.
The system triggered another trade on May 23. Luxury homebuilder Toll Brothers (TOL) announced earnings that beat expectations. The stock gapped 4% higher on the news. But my algorithm suggested the gain would not hold. It predicted TOL would reverse and turn lower on the day.
So I recommended subscribers buy the TOL June $38 put options as a cheap, speculative trade.
We bought the options in the morning. By the afternoon, TOL had indeed turned lower, and we sold the puts for an 80% gain.
On May 24, the system gave us a trade on Guess(GES) – another clothing retailer. The algorithm suggested GES would likely trade higher after its earnings announcement that afternoon. So I recommended buying the GES September $10 call options.
GES gapped 15% higher the next morning, and subscribers cashed out of their call option positions for an overnight gain of 100%.
Can you see why I think this is the most exciting breakthrough I’ve had in over thirty years?
I’m looking forward to next quarter’s earnings season – which kicks off in just a few weeks. Based on the success of my system over just the past year, I’m confident it will generate plenty of profitable trade setups.
Best regards and good trading,
P.S. My trading experience goes back three decades. And the strategies I’ve used in that time were so successful, I was able to retire at age 42.
These days, I spend most of my time at my California home. My neighbors think I’m growing marijuana, or flipping penny stocks.
But what I’ve been working on is far more lucrative: this earnings algorithm. It’s brought my subscribers huge returns in short periods of time, like 100% in less than 24 hours. Click here to learn more.