are there any CANSLIM traders here?
- Thread starter andrasnm
- Start date
It is helpful to use a pattern search tool and a chart slide show tool to find all stocks to form the cup with an handle quickly. I used use a free software aq to do this. then you can analyse the qualitative sides of selected stocks following CAN-SLIM. I used to do some backtest for patterns (close to cup with an handle), it shows the CAN-SLIM really works statistically. Only it makes money too slow.
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1] Good question;
i dont use it as a system but as far as principles-unusual in the fact they are well researched amd very seldom go against any of them in my plan.
2] As of July[7-8 -o4 close], actually below SPY or SPX average for july;
interesting DIA,
SPY, QQQ closed yesterday below his important 50 day moving average.
In bull market overall-profits still ride.
3]I use more;
liquid stocks more , which unleveraged tend to underperform his,
technical more than him.
And dont know how to use N-new product in trading Index derivatives.
Still read him [William J.O'Neil] books & Jack Schwager,
investors.com[powered by IBD, good Jack Dreyfus chart read ]
May notice a few market changes;
like good point mr O'Neill made at the time -
not quibbling over limit orders on entry [.25 cents] & miss move
in options market.
Spreads have narrowed much more than that now in index options; still tend to use mostly market orders for exits, like him.
I use it exclusively for the "investing" side of my trading, so to answer your questions:
1. 14 months (started learning CANSLIM in April '03)
2. Down 1% last year (got hurt by the many rookie mistakes I made). Break even so far for '04, haven't been many opportunities if you follow the method to the letter, which is not a surprise given that the markets are flat this year.
3. I use IBD, investors.com, and Daily Graphs Online. CANSLIM is great, but it only applies to markets that are healthy, so you really have to be able to sit on your hands when the market isn't in an uptrend, regardless of a given stock's fundamentals and chart.
I remember there is a study ( by society of individual investors ? ) that the method produced a decent return, about 20 %, from 2000 to 2003. This surprised me, as I thought it worked only in booming markets.
Don't know how the study is conducted, though.
A colleague of mine is a fan of Oneil. He said he made a lot of money in the late 90's, but didn't use it since 2000.
Don't know how the study is conducted, though.
A colleague of mine is a fan of Oneil. He said he made a lot of money in the late 90's, but didn't use it since 2000.
Actually, the methodology stresses market uptrends. So even though '00 to '02 was a down period for the market, there were tradeable rallies within those years. You'd have to be pretty nimble/fortunate to make 20% over that period, however.
I have seen the study you mentioned as well, and I've always wondered how they could perform a scientific study of the method, since the profit you make obviously depends on when you sell. There are sell rules to follow, but many are subjective and need to be looked at within the context of the overall market's behavior. Unless those conducting the study were trading it live, I don't know how valid their results are.
I'm a big O'Neil fan as well, mostly for his optimistic outlook and common sense view of the markets, but I can see how a typical investor could lose a lot of money trying to follow his methodology. You really have to be serious, detail oriented and extremely disciplined to be successful, pretty much like a trader.
What I should also add is that CANSLIM is for INVESTING, not trading. You need to be able to allow 7% stops and hold for weeks or longer.