{"id":38650,"date":"2014-08-25T19:40:38","date_gmt":"2014-08-25T23:40:38","guid":{"rendered":"http:\/\/www.smbtraining.com\/blog\/?p=38650"},"modified":"2021-05-07T09:43:25","modified_gmt":"2021-05-07T13:43:25","slug":"trade-with-a-true-catalyst","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/trade-with-a-true-catalyst","title":{"rendered":"Trade with a True Catalyst"},"content":{"rendered":"

Often new and retail traders do not trade stocks with a true catalyst.\u00a0 By a true catalyst, I mean an event that will cause\u00a0significant new buying or selling.\u00a0 Said another way, price moving buying or selling.<\/p>\n

The new trader and retail trader wonder: Why the heck is my stock not moving like I thought?\u00a0 The answer may be because they do not have a true catalyst behind their trade.\u00a0 And this may also explain why you so often get stopped out of positions.\u00a0 The Flash Boys prey on trades in stocks without a true catalyst.<\/p>\n

And then there are the b.s technical trades that too many new and retail traders make.<\/p>\n

The 8ma crosses over the 21ma, which corresponds with the Bollinger Bands under the shirt of the MACD (is this a rapper?).<\/p><\/blockquote>\n

Have you ever backtested some of these technical trades?\u00a0 I will save you some time.\u00a0 They will not test profitable.\u00a0 If your technical trade is not a WOW! then it is a PASS!<\/p>\n

You can correct this.<\/p>\n

When our new traders first go live they trade stocks with changing fundamentals.\u00a0 A stock that has announced news that will change the fundamentals for the company for good or bad.\u00a0 We have a whole list of news events that will change a company’s fundamentals.<\/p>\n

So the question for the new and retail trader is: Are you in stocks with a true catalyst behind it?<\/p>\n

1) Is there NEW news that has changed the fundamentals about the company?<\/p>\n

2) Is this a truly significant technical level?<\/p>\n

This will make your trading much easier and profitable.<\/p>\n

“You can be better tomorrow than you are today!”<\/em><\/p>\n

Mike Bellafiore is the Co-Founder of SMB Capital and SMBU, which provides trading education in stocks, options, forex and futures. Bella is the author of One Good Trade<\/a><\/em> and The PlayBook<\/a><\/em>. He welcomes your trading questions at mbellafiore@smbcap.com.<\/p>\n

no relevant positions<\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Often new and retail traders do not trade stocks with a true catalyst.\u00a0 By a true catalyst, I mean an event that will cause\u00a0significant new buying or selling.\u00a0 Said another way, price moving buying or selling. 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