20 Lessons from William O'Neil

[Henrik Ekenberg]

20 Lessons from William O'Neil

• In making money in stocks, it is to protect the money you already have.
• Cut your losses at not more than 7%-8% below your purchasing price.
• When the market is trending down, about 75% of all stocks will eventually decline with it.
• Identify stocks with higher potential.
• See when the market is changing (TRENDS).
• In a strong uptrend, the top-rated CANSLIM stocks typically go up much more than the NASDAQ or S&P 500.
• Buy when the overall market is in an uptrend.
• Buy stocks with CANSLIM traits as they break out from a tall base chart pattern.
• Take most profits at 20%-25%.
• Never let a little loss become a big one.
• Take defensive action as a downtrend begins: $CASH.
• Focus on companies with big earnings growth and new innovative products.
• Buy stocks being heavily bought by institutional investors.
• Choose CANSLIM over all strategies.
• The company names will change, new technologies and industries, but chart patterns will remain the same.
• "BUY RUMORS, SELL NEWS."
• Trying to go against this monumental amount of trading will only hurt your results.
• Your trend is your friend.
• Follow through days that note the start of a new uptrend and distribution days.
• Date the market; don't marry them.