I want to know how many traders out there use this system for their long-term trading? Are you successful at it, or you just don't get it? I've been playing around with it for some time, and have gotten good at selecting stocks, and finding the right pivot points. But, I've had trouble with the sell side. Mostly for stocks that are profitable. What have you done to get better at selling, outside of the normal 8% loss cutting? Am I not seeing the sell signals, outside the huge volume reversals? Any info would be appreciated. I got day trading, just have to get the long term.
I think it requires that you subscribe to IBD for it to work. When I took their suggestions eventually I would make a profit. It really works best in an up market. When you read the books they tell you that. I got INVN, KKD and RDY out of it which were winners. I like day trading better. I make more money.
Just read his book and appreciated his straightforward presentation of what he "believes in" (unlike so many other "gurus" that write cryptically so they always have an escape door built for when their system doesn't work). But I just can't imagine that any multiday break out system could work in this market. If someone has made CANSLIM or something close work, I'd love a few hints also. I'm starting to use IBD though to establish one of my trading "universes", but that's about all I can see it useful for now.
IBD/CANSLIM method will make you a ton of money in a bull market/upmarket but..... don't think it won't help you in a down market either. Reading IBD on a daily basis really gives you a feel for the overall market direction, which is critical in Trading Stocks. I use IBD and Daily charts as my only market tools, works great for me. Some other sites I reference are Stockcharts.com, Yahoo Finance. Check out Weekly charts on BSTE and ELAB... these look to be future IBD winners. If anyone wants to share info on this system or IBD in general I would love to participate.
i *believe* o'neil cited darvas' book as one of the inspirations for his trading. in darvas' books (how i made 2mm, and the follow-up ones), he talks about how he didn't know it was a bear market, but his system kept getting stopped out. when it happened lots, he knew it wasn't favorable for his system. as people above said, works wonderfully in a bull market, at least you don't lose your house in a bear market. darvas' follow-up books (esp. the 1975? one, you can still make it in the market) has him exploring going short with the same methodology...
I'm curious - you said that IBD is making you money. But not by a strict CANSLIM/Breakout methodology, right? Or did you just take his procedures and "tweak" them (if you don't mind me asking)?
Calibertrader, Interesting problem. You have micro tactics down, but not macro. Which means your micro tactics cannot be applied to the macro environment. Conversely, the very same methods I use for long term I also use for short term. So I guess the bottom line is I am all that and the whole bag of chips. Okay, seriously, you have to apply the corny ol' stuff that has worked for ages and continues to work... like simple moving averages, indicator divergences, trendline breaks... really way out wacky crazy stuff like that. And use the ones the big money use, even bigger money than you so you can know what they are doing. I guarantee the one minute chart is not influencing the long term trend. I know, I know, you can't believe it and your whole world is falling apart now with that revelation. But it's true. Someone had to tell you and I am glad it was me. Specifically, and you know this already G, the big money looks at the 200 and 50 or 40 sma's... many also look at the 20. And they look at the MACD and the RSI. And they look for divergences in those indicators. They use standard industry settings. No secrets. No special tactics. Cookies and punch will be served in the lounge following this presentation.
This sounds like a "when to take a profit" question to me versus a general discussion of ONEIL. What do you think trend_guy? Maybe I'm missing something in the above quote that you are seeing.