Happy Friday, friends…

Traders love to be right. It’s a natural instinct, this internal need to make a bold call and have it pay off big.

But the best traders in the world don’t care about being right all the time. They prioritize making money over being right. 

It doesn’t matter if you “nailed the call” on an event. If you didn’t make money, you have nothing to show for it. 

No one is going to give you a gold star for predicting the outcome without putting your money where your mind was.

On the flip side, if you place a predictive trade and are wrong, you’re now stuck with a loss simply because you wanted to make a brilliant prediction.

This is the risk of catalyst trading, when you take a position based on specific calendar events like earnings reports, Fed meetings, investor conferences, or product launches. 

Let me show you the pros and cons of catalyst trading (and how I trade setups around big events)….

The Best Way to Trade Big Catalysts

Catalysts present a big fork in the road for traders. If you get it right, the payoff can be big.

However, the outcome is unknown, so the trade is a gamble.

Here’s what I do instead: I wait.

Once the catalyst happens and the initial reaction plays out, that’s when I look for my trade, because…

• The major move has already happened. Now I can see what’s real and what’s just noise.
• Knee-jerk reactions often reverse. I wait for confirmation before making a move.
• Implied volatility (IV) drops after the event, making options cheaper.

3 Mistakes That Lead to Bad Catalyst Trades

Instead of betting before the catalyst and hoping for the best, I wait after and trade with the trend. 

But if making predictive trades is so risky, why do so many traders still do it?

It usually boils down to one of these three mistakes…

1. Constantly Chasing Action

Some traders think they have to trade every day. Maybe they get bored. Maybe they feel like they’re missing out. Maybe they’re just impatient.

Whatever the reason, it leads to bad trades.

The best traders don’t make trades just to trade. They wait for the right setups. They pick their spots carefully.

If you feel the urge to trade for the sake of trading — stop. That’s not trading. That’s chasing.

2. Greedy Positioning

Here’s a fact: if you buy options before a major catalyst and you’re right about the direction, you’ll make more money than if you wait until after the move happens.

That’s true. But that doesn’t mean it’s a good strategy.

The problem is that the odds aren’t in your favor. The market could move the opposite way.

Or the expected move could already be priced in, leading to a muted reaction. Or implied volatility could crush your contracts even if you’re “right.”

Being right doesn’t mean you’ll make money. And that’s why greed leads to bad trades.

3. Copying Other Traders’ Plays

During major catalysts, social media explodes with traders sharing their bets. Everyone has an opinion, and they’re all trying to convince others that their trade is the best one.

But blindly copying trades is a terrible idea.

You don’t know their full strategy. You don’t know their risk tolerance. And if too many people pile into the same trade, it becomes overcrowded, setting up the perfect conditions for a rug pull.

Trust your own research. If you don’t understand a trade inside and out, don’t take it.

Some traders made a killing on last week’s big tech earnings. But a lot of traders got crushed because they didn’t wait for the full picture before making their move.

This is the difference between disciplined trading and degenerate gambling.

If you don’t know how the market will react to an event, why are you betting on it?

Let the market show its hand first. Then trade the reaction. 

Have a great weekend,

Ben Sturgill

P.S. If you want access to the system that achieved an 89% win-rate with a 72% average gain…*

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*Past performance does not indicate future results