Though there is still some time before the third quarter earnings season gets under way, there are a few things you may want to keep in mind if you have positions, or plan to day trade those stocks. Earnings season can be exciting and stressful if your not prepared. Everyone from the day trader to the long term investor is making decisions based on the move that occurs after earnings. This prior earnings season was quite active and there is no reason to think that the next one wont be.

There is one thing you want to keep in mind as we approach the summer time earnings season....Volume. The summer time can be a low volume trading environment. This just means that many are on vacation and trading can be slow and boring. What happens is the trading algorithms become more prominent as the humans are on break. While this can be a good thing it can also cause undo stress.

If you plan on day trading around the moves due to earnings you should know that the algorithms may have the upper hand. Technical patterns will mean less as the algorithms are trading mostly on action and are not so focused on the traditional patterns. Many day traders will spend their summers trading a smaller position and taking a little less risk.

If you are a long term position holder then you may just have to wait it out. If there is a sharp move due to earnings consider what has changed. If the company still fits your investment rules and guidelines then just chalk it up to summer time volume. Of course if something changes with your investment thesis then you would act accordingly.

Though this may sound like common sense, you would be surprised how the odd summer time action can thwart even the most bullet proof strategy. Happy Summer!