How to use the timing and release of quarterly statements when trading stocks

Trading Stocks is great for investors who know how to valuate a business but even better is knowing when to place your trades when making these stocks investments. There are two sides to investing. 

• Knowing what to buy and 
• knowing when to buy

Knowing what to invest in is the easy  part as there are a lot of blue chip company doing great however knowing when to buy is quite challenging. It is particularly challenging because you have to be sure that a stock market burst is not at the corner  or that you are not buying a stock whose price will not undergo any significant movement in the near short and medium term.

THE PRE- MARKET BEHAVIOR OF THE STOCK MARKET

As it is, the financials of most stocks are released on a quarterly basis but these stocks are usually preceded with some pre-market activity (usually ranging from some weeks to about a month or so to the actual release). This is primarily because of the fact that be it as it may some people will be privilege to get some first hand information about the market before the general public. This is known as insider trading and  it is illegal. But let us face it, there is little that can be done about this however we can still utilize this pre-market movements to give us an indication of how good the financials to be released could be. it could also help us to pre-determine what kind of trades we are going to be making when the financials are released

THE POST-MARKET BEHAVIOR OF THE STOCK MARKET

The post market reaction of the market on the other hand is the one most traders are aware of. People that do not know how to read or interpret these financials usually wait for others to do so and also make purchases before they place their trade. This is usually accompanied by a surge in a particular direction. As an investor, you can easily combine this with some technical indicator of your choice to make very short term profits of 1 to 2 months.

BOTTOM LINE

Knowing what to buy is great but knowing when to buy could make a huge different to your profits. I urge you to start monitoring this behavior on your shortlisted stocks before buying as it will make a positive impact on your portfolio.