Catalysts have the potential to change investors and traders’ expectations. There are two distinctive types of catalysts in the stock market – active and passive.

Active catalysts tell you when to buy or sell.

Passive catalysts tell you what is the potential behind a move once an active catalyst is introduced. Their role is to explain intelligently the reason behind a move.

The only active catalyst is Price action. Simply put, it does not matter how smart you are or how genius your investing thesis is. Unless and until the market agrees with you, you won’t make a cent. (more…)