In my quest to learn all I can about this crazy market, I've read my share of compelling books. The one lesson that seems to be echoed throughout my reading is that in order to become a master investor you must learn from the masters before you. Guys like Peter lynch, Warren buffet, and William O'Niel. O'Niel's CANSLIM approach is very intriguing and is advertised as the number one stock strategy. Ive been a trial subscriber to ibd for a couple of weeks now and I really like the things that they offer. I'm going to be renewing my subscription here soon. I'm also reading How to Make Money in Stocks. The chart analysis lessons are quite hard to really understand, and at first glance it seems like their are cup and handle and W patterns all over the place. In the latest edition of the book, O'Niel warns us that in bear markets it is very difficult to spot proper breakouts and buy points. Has anyone following CANSLIM been able to spot real breakouts in this market? I'm not sitting on the sidelines with cash waiting for the big bang, I'm a bit more Foolish than that, but I am considering becoming more engrossed in the CANSLIM approach. Any advice?
CANSLIM does have a market timing component, so there is nothing wrong with sitting in cash in a declining market. Or, you could be short - particularly one of the short funds, although I think O'Neil never talkes about that.Read in the book about follow through days. Here is an old article, which I saved: http://www.actwin.com/kalostrader/FollowThrough.htmAnyway, this is a very volatile market, and if I went long a particular stock I would buy puts on it. Perhaps even sell out of the money calls and use the money to buy puts.
I am considering becoming more engrossed in the CANSLIM approach. Any advice? If you follow the CANSLIM approach you will do well. If you follow some/most of it but ignore "a couple" rules then you will lose money.
I noticed that the CANSLIM approach is very specific, and there isn't much wiggle room. It's very all or none. that being said, I don't want to sit out on the sidelines. There's always a bull market somewhere right? My father also messed with options and was burned during the tech boom n bust. Because of that I'm very hesitant to get into them. I'd rather just stick to solid companies.
That there is always a bull market somewhere is extremely dubious, and certainly in this market it is hard if not impossible to find the bull.Much more simple to be in some of the Direxion 3X ETFs, which did well yesterday and look good today. Such things are only for a trade - not anything long term.
I don't want to sit out on the sidelines. There's always a bull market somewhere right?There is also always a bear market somewhere and you are more likely to find that.
There's always a bull market somewhere right?You really need to consider and analyze the emotional factors that influence your trading. It is not fun sitting in cash on the sidelines. It's much more fun checking your stocks on a daily/hourly basis watching them go up and down making you lose or gain money. There really is a psychological draw to want to have a position and check the position's profit/loss repeatedly. The problem is, you're not supposed to be doing what's fun. You're supposed to be following the strategy.
It is not fun sitting in cash on the sidelinesI disagree. If I get in, make 20,30,60% and then out after a few/several months, I think it is great fun. I look at my statement and then listen to others here who lost a bunch and have fun. The ultimate market is one where I can make 40% in a month and then relax the rest of the year.
I disagree. If I get in, make 20,30,60% and then out after a few/several months, I think it is great fun. I look at my statement and then listen to others here who lost a bunch and have fun. The ultimate market is one where I can make 40% in a month and then relax the rest of the year. That's not the point I was trying to make. Nobody says "I am having fun because I did not go to the casino and lose $200. I'm having the time of my life sitting at home not losing money playing something with negative expectancy." No, being in the market allows you to wrap yourself up in the eomotions of watching your positions go up and down just as you watch what the die land on or what comes out on the slot machines.I've never thoght it was fun to listen to others who lost a bunch of money either.People will have a hard wired tendency to always want to have multiple positions in the markets at all times, and that is not the right mindset.
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