Trade Like an O'Neil Disciple: How We Made 18,000% in the Stock Market

Chapter 5. Tricks of the Trade

Bill O'Neil used to tell us that making big money in the market wasn't about buying the right stocks as much as it was about handling them properly once you've bought them. You can always buy a potential leader as it initially breaks out from a first-stage base at the outset of a big price run, but if you sell it after it goes up 10 percent and it continues up another 190 percent, you didn't handle it properly. This is a critical component of our methodologies, which include a number of specific techniques that can be used in real time to handle positions in strongly performing stocks.

Also as more and more investors and traders use the same tools and have access to all the same real-time news, charts, data, and market indicators, market participants all see the same things happening at the same time, taking on the characteristics of a herd, or at least a market that to some extent watches itself. It is, therefore, understandable that most investors and traders, regardless of their methodology, would like to find some additional tools or tricks, if you will, that can provide them with an edge, both with respect to finding alternative and early buy points relative to standard new-high/base-breakout buy points as well as a coherent system for selling stocks and handling positions in real time, particularly positions in potentially big, winning stocks. If you count yourself among these investors and traders, this chapter will provide some answers and ...