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

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

And then there are the b.s technical trades that too many new and retail traders make.

The 8ma crosses over the 21ma, which corresponds with the Bollinger Bands under the shirt of the MACD (is this a rapper?).

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

You can correct this.

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

So the question for the new and retail trader is: Are you in stocks with a true catalyst behind it?

1) Is there NEW news that has changed the fundamentals about the company?

2) Is this a truly significant technical level?

This will make your trading much easier and profitable.

“You can be better tomorrow than you are today!”

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 and The PlayBook. He welcomes your trading questions at [email protected].

no relevant positions