School

Module 5 — Reacting, not predicting

Judging catalyst quality

6 minute read

In plain English

Catalysts vary enormously: a signed contract, an earnings beat, a dilutive share offering and an unexplained volume spike are not comparable.

Why it matters

The reason behind a move shapes how it usually behaves and what could invalidate it.

Example

A share offering often increases volume and pushes price down — the same volume signal, the opposite implication.

Try this

For each pulse, categorise the catalyst before forming any view.

Common mistake

Treating 'there is news' as inherently positive.

What this does not mean

A strong catalyst does not mean a strong continuation.

Educational content only. Not financial advice.