How to Trade Like William J. O’Neil


Insiders say that William J. O’Neil founder of Investor’s Business Daily and William O’Neil and Company Inc, has a better trading record over a 50 year period than even Warren Buffet or George Soros. O’Neil has spent his life trading and studying what really works in the stock market. He made over a quarter of a million dollars trading in his early twenties and bought a seat on the New York Stock exchange and never looked back. If you want to trade like one of the very best here are 10 of his strategies.

  1. Enter a stock at the key pivot point out of a ‘cup and handle’ formation that has shaken out all the weak holders. The best buy points is when a stock breaks out of this handle formation to all time highs.
  2. His first primary goal is to let a winner run up at least 20% -25% or if the break out fails cut the loss at 7%-8%.  Ideally he likes each winner to pay for 3 losers for a 3:1 risk reward ratio a few straight winners grows your account quickly.
  3. If a stock runs quickly to 20% in a few weeks he likes to hold it for 8 weeks, these are likely the ones that will be the really big winners going up 50% to 100%.
  4. He does not diversify, O’Neil focuses on 4 or 5 of the biggest winners, selling losers to add to winners.
  5. He likes to add to winners on the way up once he has made a profit of about 4%.
  6. He wants the stocks with the best fundamentals and growth in the market,  his CAN SLIM method is a great guide for these parameters.
  7. O’Neil does not have trouble admitting when he is wrong and cutting a loss and then turning around and buying the stock back on a reversal.
  8. O’ Neil was influenced by and recommends books by Jesse Livermore, Nicolas Darvas, Bernard Baruch, and Gerald Loeb.
  9. He believes that in market down trends you go to cash and take smaller profits and cut losses quicker, 10% profits and 4% losses as a general plan.
  10. The keys to the amazing success of William O’Neil is his relentless study of charts and what works in the stock market and his ability to identify where the big money will be flowing and taking positions before the professionals load up.