I'm getting there. I'm concerned about aligning what I do with intelligent trading practices - buying into weakness instead of strength - but that will take me some time. I do feel greatly enthused to be showing some sizeable daily returns. You should take the two month deeply discounted trial to MarketSurge; it is mind-altering versus what we amateurs do on our own.
Thanks for the advice that I will follow! I'm already subscriber to IBD and was busy digesting and understanding all the information they give while at the same time building my own process. Now that the dust settles, I think I will soon get that trial.
I think you're asking the wrong question. Can you earn a positive return using Can-Slim? That's not as easy as you might think since Can-Slim will expose you to stocks that lose 3-5% before you ever earn a nickel. If you are singlemindedly focused on making money from trading and that's close to your mission in life, you might outperform the market. I've put everything I could into learning Can-Slim / MarketSurge over the last three years and I can't recall a trade where I made money over 73 bets. Maybe ten names barely eked out a profit. I did earn the subscription price by following Mark Minervini into couple trades. My current assessment is that it will take me three more years to get comfortable holding losing positions for more than a couple days. So why not hold the indexes? It's not so easy to do that either. Losses derange me. I currently day trade and use MarketSurge primarily as a filter.
Two things that irk me about IBD and William O'Neil. O'Neil begins his book with a quote from AAII that Can-Slim is the most effective strategy they've seen on their platform over the years. However, the Can-Slim strategy they use is a conventional backtest of the six most prominent fundamental factors that 5500 asset managers all look at in their screens. They represent perhaps 25% of Can-Slim as laid out by O'Neil and make no reference to pattern recognition, basing patterns and pivot breakout points. There's little core resemblance between what AAII calls Can-Slim and the self-torture of interpreting MarketSurge. O'Neil better than anyone knows how little AAII reflects Can-Slim but he places their "most effective strategy we've seen" quote at the head of his book. That speaks to integrity versus commercial instincts. Secondly, MarketSurge blithely commits serious analytical misrepresentation of stock appreciation on their Daily Charts, likely the most used exhibit on their platform: "Do any of the Can-Slim thought leaders invest even 1% of their time in verifying MarketSurge's analytics? Arithmetic scaling for any period longer than 3 months for daily charts is severely biased and overstates the depth of bases. Log scaling, which is the unbiased presentation of price appreciation, is invariably the choice for charts used for trade analytics. The first 8 months of MarketSurge's daily charts are rendered useless by the compression arithmetic scaling introduces. The depth of bases so formed are overstated, perhaps by as much as 50%. Anyone in the corporate investment world would be fired for exercising so little due diligence with regard to the tools they use. Log scale guarantees that the same slope of price anywhere on the chart is equivalent. With arithmetic scaling, an increase of $2 on a base price of $10 (left side of the chart) rises the same amount as a $2 increase on a base of $50 (right side of the chart). But a 20% move should not look like a 4% move on a chart. Alternatively, look at MarketSurge's Daily charts: stocks fifteen months ago didn't all trade in a tight range and now trade in a range that's 5-10 times wider. Very likely, they trade in a roughly similar range currently as they did fifteen months ago. Log scale would show that. An arithmetic chart is constructed by showing the same incremental price level on the x-axis from left to right ($10, $20, $30 ... $100, for example) and the same incremental price increase from bottom to top on the y-axis ($10, $20, $30 ....$100). A $2 price increase from a base price of $10 would show the same incremental change in height as a $2 price increase from a base price of $100. That creates continuous and enormous distortion in how price appreciation is represented on an arithmetic chart as price moves from left to right." from my Can-Slim entry on Reddit "MarketSurge's inappropriate use of arithmetic scale on their daily charts". That said, in our mixed grey world of self-promotion and bloviation, Can-Slim remains one of the few places where the retail investor can investigate the moving parts of a complex and potentially profitable strategy. And despite their motives, you can learn a lot from these guys. No other retail strategy has drawn so many high-level adherents.
IMHO,Canslim is much closer to an art than a science.If it wasnt,everyone would be doing it and trading from their mega yachts If you backtest the Canslim fundamental factors they are mediocre at best. Log vs Price charts are obviously subjective and up to the trader to interpret. Thats one of the basic shortcomings of sloping tendlines vs horizontal support/resistance lines. Have you looked at Momentum Masters?? I think it was Zanger who basically boiled it down to relative strength and breakouts.. Camslim is a blueprint ,no more no less
As ridiculous as it may be,the benefit may be that is chosen approach of the "herd".. I do not put much faith in sloping trendlines for several reasons..