Bollinger bands trading strategy: Trading earnings reports // Stock technical indicators basics 101, bollinger bands tutorial, bollinger bands explained, bollinger bands secrets, bollinger bands and rsi, bollinger bands and macd, bollinger bands and stochastic, bollinger bands forex, bollinger bands binary options, stock market technical analysis, technical analysis chart patterns, stock market technical analysis tutorial, stock market technical analysis training welcome to looking at the markets with David Moadel just wanted to give you a
quick tip about bollinger bands i like to use them as overbought and oversold
indicators but they're not perfect especially around earnings announcements
or earnings reports when there's an earnings report that the price can bust
right through the top band or the bar or the bottom band thus rendering the
Bollinger Bands I don't want to say useless but less reliable less useful as
a buy or sell indicator and i'll give you a few examples
this is lowes and you can see there was an earnings miss here
in in mid-august and the price was in the middle here and the bollinger bands
were really tight and you can see that just busted right through that bottom
band just totally ignored the bands and first it right through it
ok there's another earnings announcement here it was in earnings beat and it went
right up through the top band so during these earnings announcements the price
tends to just ignore the bands and just bust right through on and so if you have
a position in a stock or ETF and you know and earnings announcement is about
to come up if you have a profitable position you might want to consider
exiting the position immediately prior to the earnings announcement because no
one really knows which way it's going to go and if you're using bollinger bands
as your overbought oversold indicator you know that don't count on it
necessarily working or being totally reliable during these earnings reports
here's apple for another example
it the the camp this is the daily candlestick chart and it hit the bottom
band here which usually means that it's a good time to buy but right after it
hit the bottom and there was an earnings miss and boom right through the bottom
band so that's a perfect example of you being aware of the earnings
announcements and perhaps staying out of the you know not participating in the
stock if you can help it during those times
here it is in the middle of the bands and there is an earnings beat and boom
right through the top band so that's another example here's Twitter it here
it is hitting the top band and then earnings miss boom right through the
bottom man totally ignoring the band's here is an earnings miss again
right through the bottom and all right now hear this may look like an earnings
report but it's not this is actually news driven there was a rumor that there
that Twitter was going to be bought out and you know the old saying by the rumor
sell the news
well this is by the rumor you know the the news of the rumor came out and it
went right through the top band now you can't necessarily predict you know when
these rumors are going to happen or when news events are going to happen and so
that's a good reason to always take small position sizes whenever you buy a
stock or whenever you buy options on a stock or ETF because these these big
news and and rumor events can happen unexpectedly and they can have a massive
effect on your stock and ETF prices so always use small position sizes
so there's a little tip for bollinger bands you know maybe exit your position
prior to an earnings report if you can and if you'd like more help with
technical indicators or just putting together a trading plan please send me
an email anytime my email address is David Modell @ gmail.com if you like
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thank you so much for listening and watching and I'll talk to you soon
yeah