I don’t have to tell you how the media—online, TV, and newspaper, is rampant with headlines.
And now, with 24 hours of news, it just keeps getting worse.
Knowing what and who to trust is nearly impossible, with everything flooding our newsfeeds.
One thing I do know…never trade on politics.
A question that frequently arises in the trading world is, “How do we treat company-issued press releases?”
Sometimes, the information contained within is trustworthy and actionable.
But many times, it’s complete nonsense…
You see, management knows how to play the PR game. They strategically drop this news to create hype for their stock.
This happens A LOT with penny stocks. They need something to get that ticker moving in an upward direction.
Take a look at BioRestorative Therapies Inc. (NASDAQ: BRTX) from a month ago. I spotted this during my Pre-Market Prep that day.
Management dropped a press release early in the morning.
Honestly, the release wasn’t complete BS. It announced an FDA Fast Track Designation for one of their products…
But it wasn’t that meaningful either.
Regardless, it was enough to get investors to buy the stock. And they did. The stock went vertical.
BRTX 2-Day, 5-Minute Candles Chart; StocksToTrade
And after that, it quickly fell back to earth, leaving many bagholders in its wake.
The lesson here is that blindly reacting to headlines and press releases can get you in serious trouble.
Today, I’ll show you how to cut through the noise, break down a press release, and spot the red flags before you get trapped.
Table of Contents
Avoid Getting Trapped by the PR Game
One of the biggest mistakes traders make?
A company drops a press release filled with hype, buzzwords, and vague promises… and traders jump in without looking deeper.
I don’t want that to be you. I don’t want you bagged on a stock that fakes you out and fades all day.
Here’s what normally happens:
- The PR drops early in the morning.
- The stock rips in pre-market (because, of course, traders love hype).
- Some traders catch that gap-up…but many don’t, get in too late, and buy near the peak.
- And by the time the market opens, and sometimes before, the stock collapses.
- Then it fades all day and possibly into the next.
How to Spot the Red Flags in Press Releases
So, how do you see this coming before you get trapped?
Here’s what to watch for:
Over-the-top buzzwords:
If it sounds like marketing fluff, it probably is.
No real numbers:
A company dropping real earnings is one thing. That’s legit.
But vague terms like “major contract,” “huge partnership,” “record revenue”—without actual data—are a red flag.
For example, BRTX’s PR used phrases like, “…fill significant unmet medical needs..” and “…comparatively very positive preliminary Phase 2 clinical data…”
There was not one actual figure to be found in the whole release.
“Unnamed” partners:
If it’s Apple, they’re gonna say it’s Apple.
But if the PR says “partnering with a leading tech company,” and no actual name is given, that’s a bad sign.
The “up to” trick:
Penny stock companies love to say this. “Company awarded a contract for up to $20 million.”
That could mean $5. Or it could be $5,000. You have no idea.
The stock’s history:
Look at the multi-month chart before you buy.
If the stock got destroyed every time it spiked, stay away.
Do you really want to be the one buying at the top?
Get Ahead of the News (Instead of Chasing It)
Get ahead of the PR before it drops.
Here’s how…
Watch SEC filings (especially 8-Ks):
Every company must file an 8-K before they drop a major announcement.
If you see a buzzword-heavy SEC filing a day or two before, that’s your first clue that a PR is coming.
Use StocksToTrade’s SEC filing tool:
StocksToTrade aggregates all SEC filings in real-time.
And if you’re tracking a stock, you can set alerts to notify you the moment a new filing drops.
StocksToTrade is the platform I use every single day.
Besides the SEC filing tool, it includes charting, technical indicators, built-in scanners, and more…everything you need to stay ahead of the game.
And right now, you can get two weeks of both the STT platform and our Breaking News Chat service for $17.
Grab your 14-day StocksToTrade + Breaking News Chat trial today for only $17!
My Final Thoughts…
Don’t be the trader who buys just because of a headline.
Don’t fall for vague, overhyped PRs…
And don’t ignore the stock’s history—if it has failed every other time, it’ll probably fail again.
Instead…
- Look at the SEC filings.
- Check the chart history.
- Avoid vague buzzword-filled PRs.
- And use real data to make smart trades.
Get ahead of the herd, and don’t be a bag holder!
For additional trading mentorship, subscribe to my StocksToTrade Advisory service.
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Have a great weekend, everyone. See you back here on Monday.
Tim Bohen
Lead Trainer, StocksToTrade