In The Trading Cockpit with the O'Neil Disciples: Strategies that Made Us 18,000% in the Stock Market

CHAPTER 7

A Trading Simulation

The most efficient way to put together everything that we've covered in the previous chapters is to engage in a bit of old-fashioned trading simulation. We will take you step-by-step, day-by-day through the relevant price/volume action in two leading stocks from recent bull market cycles. In this manner, you can gain a practical understanding of just how decision making occurs in real time according to the rules and techniques embraced by our particular brand of the OWL (O'Neil-Wyckoff-Livermore) investing and trading methodology.

This is where the rubber meets the road, and it is the only honest and practical way to demonstrate how one implements pocket pivots, buyable gap-ups, and other OWL buy points in conjunction with the Seven-Week Rule and key moving averages. In the real world, under fire with real money in a real market that is by any definition continuously changing and dynamic, there are many nuances, twists, and exceptions that require the implementation of one's judgment within the context of sound buying and position-management rules. Developing one's judgment to the point where it becomes ever more reliable in real time requires a certain catalytic level of hands-on experience. While we cannot bestow years of experience in the markets on you by hooking you up to some sort of science-fiction mind-machine that gives you the collective wisdom and judgment of experienced traders and investors, we can take you through some examples that ...