Dear Student,
We just wrapped up one of the biggest earnings weeks of the season…
Microsoft delivered strong results, giving tech a boost early on. But Apple’s cautious guidance and Amazon’s mixed report reminded everyone that this market is still walking a tightrope.
In a week like this, headlines fly and opinions swirl—but the real edge comes from stepping back and looking at the patterns.
And that’s exactly what we’ll be focusing on in today’s Q&A.
I’ll answer some key questions I’ve received from the Patterns & Profits family about earnings and trading strategy.
Let’s dive in…
Question #1
We’re into another earnings season. Any tips on what or where to focus?
Great question! And to answer it, I’m going to focus briefly on the behavior of stocks and sectors (we’ll take a deeper dive next week).
When one stock in a sector reports well (or poorly), it can ripple across the rest of the group. That’s why, instead of zeroing in on a single stock, I like to zoom out and look at the entire sector—and I do that using exchange-traded funds (ETFs).
Sector-based ETFs give you exposure to a whole slice of the market, which makes them a powerful way to trade trends triggered by earnings.
Question #2
Tom, I am new to options trading. How much should I start with in my account?
Excellent question! I’m sure many of your peers have the same one.
Here’s the thing: I’m not a Registered Investment Advisor (RIA), so I can’t give any personalized financial advice. That’s a conversation you need to have with your broker, based on your goals and financial situation.
What I can do is teach you how I approach the markets and the tools you need to master them yourself. You know the saying, “teach a man to fish…?” That’s what we do here.
My team and I provide education and insights on how to navigate the markets, find the best opportunities to profit, and the smart trading strategies to use.
Question #3
How much of my money should I risk in options trading?
Another great question, and again—not one I can answer personally, but I can offer a framework.
I like to stick to the 2% rule, which is limiting your risk to no more than 2% of your total account on any one trade. For example, in a $25,000 account, that means a maximum risk of $500 per trade.
And while I can’t tell you personally how much to risk, all of the trade recommendations I send to my paid subscribers follow the same, rules-based principle.
That’s it for this week’s Patterns & Profits Q&A—great questions, and I appreciate everyone who took the time to send one in!
We covered the ripple effect of earnings, why one company’s report can move an entire sector, and how zooming out can reveal bigger, better opportunities.
But we’re just getting started.
Next week, we’ve got even more earnings on deck—names like Nvidia, Meta, and Tesla are lining up. And that’s the perfect time for me to show you what I really mean by “trading the haystack, not the needle.”
Because when the big players report, entire sectors can shift—and knowing how to trade the group instead of guessing the one could give you a serious edge.
In fact, one strategy alone has been beating the markets – even during the most turbulent times.
Followers of mine who used this strategy in Q1 already locked in:
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8 winners out of 9 trades
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775% total ROI
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$25K+ in profits from $2K trades
And on Monday, I’m releasing my next trade.
Learn how to get in – before opening bell rings.
Have a great weekend!
Tom Gentile
America’s Pattern Trader
