Without question, the most reliable and consistent trading pattern on the planet is earnings. Big things happen at and before earnings for many stocks.
Many stocks gap at earnings. Netflix (NASD: NFLX) gaps all the time.
But in particular, it gaps before and after earnings, as you can see in this chart.
Notice that NFLX moves big up AND down into earnings. There are many other stocks that behave the same way.
When you’re trading these stocks, you may be tempted to pick direction and trade the run into earnings or even past earnings to play the gap.
If you pick direction correctly, you can bank.
Picking direction, however, is a bit like “betting on the black,” winning big if you’re right and losing big if you’re wrong.
In other words, earnings roulette. And who wants to play that?