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Stock Catalysts – How to Find the Sweet Spot for Entering a Trade

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In today’s article we’re gonna talk about my top five catalysts and why you should be focusing on them.

Today, we’re gonna to talk about my top five favorite catalysts and really focus on my number one earnings announcements.

Do you trade earnings? It’s one of the best times to focus as a day trader. Give me a yes or a no. Do you trade earning season and how have you done?

Earnings Announcements

We’re gonna start out with the top five beginning with earnings announcements, as I mentioned. I often talk in StocksToTrade Pro, the mentorship program, where I work with a lot of traders. I really think that if you are a new trader, or particularly if you are a part time trader, focus on earning season.

All publicly traded stocks have to announce their earnings, release their numbers four times a year. Quarterly, every three months, they need to announce this data. And then earning season is spread across about a month, sometimes even five or six weeks, because all of these companies are releasing them staggered.

There might be 10 today, 20 tomorrow, 50 tomorrow. So if you think about it, a six week period times four times a year, that’s 24 weeks a year that compose earning season, really.

And that’s half the year. So if you’re a part time trader, looking to try and squeeze this into your time, with your school, work and family, focus on earning season. And at the end of the day, it’s almost half the year and then you can take care of your other business when it’s not earning season.

Now, why do I like earning so much?

They are one of the biggest catalysts that move stocks. Everyone is looking for the next earnings winner. You’re looking for those record profits, those record sales, all of these growing numbers, because remember, when you’re buying a stock, you’re looking to buy into a growing company.

Something that’s going to increase the revenue, increase their sales, increase the value of the company, which then takes your stock from five, to six, to seven, to 10, or whatever that price is.

So earnings are my number one favorite catalyst. I’m always scanning for those earning stocks that are up on value, up more than 5% a day. Focus on them.

Contract Winners

My second favorite catalyst is the contract winners and the new product announcements. Many, many of these stocks are what you would call speculative companies. You might not see earnings results for six months, a year, sometimes even multiple years.

I mean, if it’s a biotech stock, they might not be profitable for years down the road. Doesn’t mean you can’t make money today. Many of these companies will announce a new product.

They might give lofty goals and lofty aspirations, but still, that gives day traders something to sink their teeth into and bid these stocks up. So we’ve seen many in the past. They might announce a new electric car, or a battery technology, or a new green technology, or even something that’s very hot the last year or so 2018, 2019 is these cannaboid products.

We’ve seen a ton of them where many of these companies might have a new CBD drink. Oddly enough, we had a company today. This will tell you about new product announcements. They have a CBD makeup. May sound funny, stock ran 30% today.

So there are opportunities to make on those contract announcements, as well as new product announcements.

The FDA Announcements in Clinical Trials

The third catalyst that I love, and this creates some of the biggest opportunities, are the FDA announcements in clinical trials. So as I mentioned earlier, many of these bio techs, these medical companies, their profits are projected way out in the future.

So it’s very difficult to trade these companies based on the fundamentals, whether or not they’re profitable, whether or not they have cash in the bank. But when they hit those goals, those phase one, phase two, phase three, that gives you a high likelihood that this company will be successful in the future and that’s the core of stock trading.

You’re buying the stock today, because it’s worth X today, and you think it’s gonna be worth Y down the road. And clinical trials and FDA announcements move stocks and move them over days, weeks, even years sometimes.

Now, you need to be fully versed in all of these phase one, phase two, phase three trials, but when you’re scanning for that news, look for those key words because they can create big moves.

Twitter Screener

Catalyst that I use every day, StocksToTrade has a built-in Twitter screener. It’s a great tool to look for these stocks that are moving, and it’s a great way to find the news fast. The nice thing about Twitter, I use it as like a, I call it like a hive mind.

I’ve got all my scanners in StocksToTrade, but sometimes you can’t see everything. I’ve got eight monitors, but you can still miss some things. Great thing about Twitter is that you can use all of the other traders out there, posting links and articles.

So it’s a great way to get the news first, but also, we do run into what they call like the Twitter pump these days. Sounds bad, I know, I know. The pump and dump has kind of a negative connotation attached to it.

But the great thing about a pump and dump is you can make money on the front side going long and shorting on the back side and we see that these days, where traders have big followings, and they start moving stocks around. You need to be cautious, but it is a viable trading strategy, especially on the short side.

There’s several prominent short sellers out there, that post their positions on Twitter. And when that Tweet hits, you’ll see 10, 20% moves right away. You gotta be quick, you gotta be agile, but you can use Twitter as a catalyst.

The Technical Breakout

And again, one of my favorite catalysts is the technical breakout that is strictly based on the chart. So the first four criteria I gave you were what you would call fundamental type plays.

Earnings, news, contract wins, all of those things. When we’re looking for screeners in StocksToTrade, we can scan for these stocks that are breaking key levels, whether that be a one day high, a one week high, a one year high, but that lights up everybody’s screener, brings everybody in because people love breakouts.

That tells you that the stock is getting ready to make new highs. So keep in mind, StocksToTrade is a great way to do that. We have built-in screeners that can find you breakouts. You can create your own custom screener to find those breakouts, and technical moves are a great way to make profits, both short-term, as well as long-term.

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