I read a lot. I mean, a lot more than I have in the past;  a lot more than I did in high school, or even college.

I read from good sources, bad sources, reputable sources and from sources that could hardly even be considered “news”.

Why do I bother with all of this? Well, because it’s what sparks my trade ideas. It gets the juices flowing, the charts opening, the option price scanning….it all starts with a kernel of an idea.

When you sit down at your trading desk and begin to read as I do, you start to draw from experience about what has worked in the past and what hasn’t worked in the past. You unconsciously draw knowledge from thousands of scenarios that you’ve seen before in the markets. You remember how a certain stock behaved after some B.S. “news” story broke and how the retail trading crowd piled in, only to get caught a few days later in a sell-off when reality re-entered the equation.

Granted, sometimes things stay irrational longer than anyone can remain solvent, but your job as a trader is to take calculated risk – not to win on every single trade.

I would also add that while it’s good to remember what moves a stock and why, it is equally good to have some sort of memory of option prices at certain strikes that you are interested in. After all, if you were shopping for a pair of jeans and saw that they were on “sale”, you would most likely have a general idea of their “fair value” based on where you have seen them sold in the past.

Throughout earnings season, I will be posting trade ideas on my Twitter feed. Please feel free to shoot me a message and ask questions – I’ll be happy to help.