Every day, dozens of press releases flood the market with news of partnerships, product updates, AI buzz, and biotech breakthroughs.
But the pro traders understand that not all news is created equal.
Just because a stock has a headline doesn’t mean it’s a buy. That’s one of the fastest ways to end up chasing garbage and holding the bag.
But I get it… In today’s market, it’s easier than ever to fall for hype, especially when algos and traders are reacting to headlines faster than most people can read them.
The challenge is knowing which headlines are real and which ones are total bunk.
Just because a stock has a press release doesn’t mean it’s a real opportunity. In fact, in many cases, those headlines are designed to suck you in, especially when they’re loaded with buzzwords like “AI,” “quantum computing,” or “crypto reserves.”
So how do you tell the difference between a headline that leads to a multi-day run… and one that burns out by lunch?
Table of Contents
What Is a Catalyst (And Why Does It Matter)?
A catalyst is the reason a stock moves. It gives it life. Simple as that.
More specifically, it’s an event or development that changes how the market views the stock.
Yes, a stock can move on no news, but it’s rare, and it’s almost impossible to predict. News catalysts matter because they give us a timestamp, a reason to pay attention, and a moment to plan around.
When a stock moves 100% out of nowhere, without any news, you’re left guessing. Is it a pump? Is it manipulation? Is it sustainable?
But when there’s a clear news item, and you know how to evaluate it, now you’ve got an edge.
Real News vs. Fluffy Headlines
So what makes a catalyst real? Well, it’s easier to define once you understand what doesn’t count.
A press release that simply says a company plans to do something in the future isn’t a real catalyst. That’s just speculation.
The same goes for headlines stuffed with buzzwords like “AI” or “quantum computing” but lacking any actual substance or follow-through.
And if the announcement is about something that might happen six months from now? That’s not actionable news but rather a placeholder for hope.
If they’re not launching a product or signing a deal with actual numbers, you’re dealing with junk information.
Why Hype Sells But Doesn’t Sustain
We’re in an era where algos read headlines before humans do. If a press release has the right buzzwords like AI, crypto, quantum, etc., it can trigger a wave of automated buying in seconds.
Companies aren’t dumb. They know this, and that’s why they frontload headlines with the words they know will move markets. It’s not necessarily “pumping.” They’re just trying to get the word out.
But as traders, we can’t fall for every flashy headline. We have to read between the lines.
Here’s the key: A company saying they “might” do something isn’t a catalyst. A company saying they “did” do something is.
Catalysts That Actually Matter
Let’s run through the types of news that do have the potential to create real, tradable moves.
Contract Announcements:
If a company locks in a deal with a major player like Microsoft, Nvidia, or Meta, that’s real. That shows demand, revenue potential, and credibility.
Market-Ready Products:
A new product available now is news. A prototype still in development is not.
If a company announces its product is actively being sold on Amazon, that’s something to take seriously. That’s real distribution, not just wishful thinking.
Hot Sector Sympathies (With Substance):
Sometimes small-cap companies piggyback on big-name news like a microcap following a Meta announcement about smart glasses.
These plays can work if the small-cap has a real, marketable product. But if it’s just “we’re working on something similar,” take a pass.
PIPE Deals and “Smart Money” Investments:
A PIPE (Private Investment in Public Equity) is basically when a hedge fund, family office, or high-net-worth investor puts real money into a company.
This is what I like to call “smart money confirmation.” If someone’s writing a $10 million check, odds are they’ve done serious due diligence.
As a retail trader, you can ride the coattails of that research, without doing it all yourself.
The Best Way to Identify Real, Tradable News
Let our Breaking News Chat service do the heavy lifting for you.
These are two 25-year veterans who watch everything from Twitter feeds to press releases to SEC filings, and feed it to you in real-time. It’s like having a second set of eyes on the market so you don’t miss what matters.
Even better, they filter out the nonsense and fluff, so you’re only acting on real, trade-worthy news.
Right now, you can get two weeks of both the STT platform and our Breaking News Chat service for $17. Try it out now and see why I use it every single day.
Breaking News Chat + STT for 14 days and see why so many traders trust it.
My Final Thoughts…
The market is filled with noise, and every day, new traders get lured by flashy headlines into buying junk stocks with zero follow-through.
Here’s the bottom line:
- Real catalysts = real opportunity
- Fluffy headlines = fake moves and fast fades
- Algos can trigger the initial pop, but only real news sustains momentum
- If you’re chasing without reading, you’re just gambling
To stay in the game and keep your account alive, focus on the news that matters. That’s where real setups come from, and where the real gains are made.
Have a great day, everyone. See you back here tomorrow.
Tim Bohen
Lead Trainer, StocksToTrade