How does In the Trading Cockpit with the O'Neil Disciples differ from your first book, Trade Like an O'Neil Disciple?
The new book is in fact a logical follow-up to the publication of our first book as well as the simultaneous launching of our website back in August 2010. Since then, both the first book and the website have brought us into contact with thousands of investors who, with their equally numerous questions, have provided us with interesting and meaningful insight into how the information and methods we cover in our first book and our website is processed and understood. In other words, these questions have helped us to understand what investors have difficulty understanding, and this new book largely addresses those issues. As well, we delve into the nitty-gritty of utilizing our methods with discussions and introspective quizzes regarding one's trading psychology, detailed trading simulations, and the entire issue of exactly where the "rubber meets the road" when it comes to using our enhanced O'Neil-style trading and investing techniques.
What are some of William J. O'Neil's trading techniques and what makes them a timeless ongoing winning strategy?
While the times may change, human psychology does not, and William J. O'Neil built upon the work of his predecessors such as Jesse Livermore, Nicholas Darvas, Richard Wyckoff and others to originate his system of finding and investing in entrepreneurial-oriented growth stocks. The essence of O'Neil-style investing is the search for innovative companies creating new products and services that drive the leading edge of any economic growth phase, such as former and present market leaders like Apple (AAPL) in the New Millennium; America Online (AOL) in the late 1990s; Cisco Systems (CSCO) throughout the 1990s; and Microsoft (MSFT), Walmart (WMT), and Home Depot (HD) in the 1980s.
It is companies like these during their high growth periods that are the de facto lifeblood of the world economy and offer some of the most compelling profit opportunities in the stock market. O'Neil essentially codified the fundamental and technical characteristics of these stocks from a historical perspective that is then utilized as a real-time template for finding similar leaders in the present.
How do you incorporate your own trading strategies with those of O'Neil?
Our trading strategies are intended to enhance one's use of the O'Neil method, not replace it. Based on our experience as former portfolio managers for William J. O'Neil + Company and investors who have used his methods for well over two decades, we found that the main difficulty for most investors is not in being able to find a potentially big, winning stock, but in understanding proper entry points and, even more importantly, how to handle a big, winning stock once you have it in your portfolio. By overlaying the O'Neil system with additional buy points like "pocket pivots" and "buyable gap-ups," we arm readers with practical tools that not only identify concrete buy points, both at the outset of a new trend and in the middle of an existing trend in a leading stock, but also provide early and alternative entry/buy points in potential leading stocks in an era where the "crowd" sees obvious technical buy signals such as range or base breakouts.
What is the Seven-Week Rule for when to sell?
The Seven-Week Rule is a practical position-management system that identifies the use of the 10-day and 50-day moving averages at appropriate junctures within a leading stock's overall price move, providing concrete stop-loss points along the way that help investors preserve gains. Our studies show that leading stocks will tend to follow either the 10-day or 50-day moving average, and that they can shift from following one to the other at various points during an intermediate-term upside price trend. Using the Seven-Week Rule to determine which moving average is used at which point in combination with pocket pivots and buyable gap-ups provides the investor with a practical system for buying, building, handling and selling positions in big, winning stocks.
What key technical signals can be used today to analyze stock movements and predict the price trends of an array of leading stocks?
We use pocket pivots and buyable gap-ups not only as buy signals, but also as a feedback mechanism for assessing the market's health and bull market potential. In strong, constructive market environments, leading stocks will often show a number of such buy points and provide investors with concrete, ready buy signals upon which to act in real-time. In a healthy market environment, upside follow-through will generally be seen following such buy signals. In a weaker and less trending market environment such as we believe we are in today, these buy points will tend to fail more often or show little upside progress after the actual signal. In this case, such a "feedback loop" also serves an extremely useful purpose in telling us that the market environment is a dicey and perhaps dangerous proposition where the odds of upside success are not in our favor.
I've been waiting patiently for this book for over 8 months. Yes, I read their first book and loved it. My biggest winners have been since I learned the buy-able gap-up. You can tell both of these guys eat, sleep and drink investing. They do their homework. I hope to develop the same level of commitment and passion for it as they obviously have.
They took many of the questions they have received from their members of their website and answered them in this book. I am only 25% of the way through the book and have already gotten way more than my money's worth. If you are an active trader, you will see yourself in this book. They address many of the variances that happen to make, what looks easy, picking stocks that go up in price, not so easy.
They help you to keep it simple and focus on what's REALLY important. Accepting the uncertainty of trading, being in at the right time and out at the right time, having patience to wait for right opportunities, and how to recognize those.
A little background...
I started trading in 1999 and was lucky enough to meet Bill O'Neil and hear him speak at a $5000 investing seminar in San Francisco in March of 2000. The very Monday that CMGI gaped up from $200 (close on Friday) to open at ($270). Bill was just one of many speakers that day and the only one saying this is a bubble. Protect yourself now. At the time I didn't know a lot about investing, but my intuition told me, I was in the midst of a master. And yes, that day was the highest CMGI ever traded for, after that it plummeted over 99% and never came back. While all 400+ people in the audience were bubbling over with excitement, Bill knew. In fact, that very day was the beginning of the end and the start of the worst market decline since the crash of 1929.
Bill is in my mind the greatest investor ever! (Yes, including Jesse Livermoore who went broke at least 3 times, died broke and killed himself. To get my attention and following, you have to follow that same, O'Neil / Livermoore style of investing. It's the only thing that I have found that is a solid system for high returns and low risk. The authors of Trading Cockpit, Understand the weak points of CANSLIM and address them. They have found a low risk way of getting in a bit earlier than waiting on a traditional "break-out" so that when you make the purchase, you can afford to sit through a bit of a correction without being "shaken out". So far it's working for me and I appreciate all the valuable insights I've learned.
And by the way, the very best insight I have ever learned, was from their first book, it was a conversations that Gil has when working side by side with Bill. Bill said, "Don't talk about your trades." And since then I never have. It just clouds your thinking and gets EGO in the way. That has helped me more than anything.
Listen, I could go on and on and probably bore you to death, because I'm no sage investor, but, like you, I can recognize wisdom when I hear or see it and here's the bottom line.
If YOU agree with the trading philosophies and found helpful the following books:
"How to Make Money in Stocks by William O'Neil,
"Reminiscences of a Stock Operator by Edwin Lefevre
"How i Made $2 000 000 in the Stock Market" by Nicolas Darvas"
Then, you are going to also LOVE this book and find many helpful distinctions and insights. It has now been moved to be AT LEAST in my top 5 investing books that I've read... ever! (including their first book... this one is even better)
And in the days of not know for sure if a review is genuine or not, let me say, I don't know either of the authors, have never met them. I buy a LOT of books from Amazon and this is only my 2nd review ever. But I noticed that because the book is new, no one had written a review yet. This review is to help both the authors and you. Buy it!! I promise, if you are serious about investing, you love to learn and want to improve even more, then this book is for you. I truly believe you will find it helpful.
This book is a great modern day addition to the methods and legacy of William O'Neil, Richard Wyckoff, Jesse Livermore, and Nicolas Darvas.
The beauty of this book is its simplicity. Authors Morales and Kacher have reconfirmed what I have learned over a dozen years in actively trading the stock market for profits. Money is made in the trends of the current leading stocks by learning to understand the clues in the chart action. All that is needed to track the flow of capital in and out of a stock is the price action, volume, and some key moving averages like the 10 day simple moving average along with the 50 day and 200 day. Chart patterns are also great tools to see the behavior of traders and investors playing out in buying and selling with patterns forming at support and resistance levels.
The book explains in great detail how to use the signals of the pocket pivot and gap up entries to give a trader an edge. The book also comes with many sample charts taking the reader through the step by step process of trading these entries based on developing price action. The charts in this book are very valuable giving the reader a chance to gain experience by studying these charts and how the entries played out. For me studying the charts available in William O'Neil's book "How to make money in stocks" was key to understanding how monster stocks move and what is possible in a trend. I believe the charts in this book are the same way giving the reader access to past performance to study and understand what to look for.
The explanation on how to use the 10 day or 50 day moving averages as signals to exit a winning trade based on price action and trend instead of news and opinions is worth the price of the book. It is very similiar to one of the methods I use to outperform the market.
If you want to cut through all the clutter and noise in the stock market and get on the right track for profitability in your trading and investing then this is a great place to understand what really makes money and learn to discard what does not matter. Both authors mentored under the legendary trader and investor William J. O'Neil and added their own research to make this book a powerful resource.
One of my top recommendations out of hundreds of trading books.
This is an excellent book and highly recommended to anyone that follows the OWL (O'Neil, Wyckoff, Livermore) methodology (or ethos, as the book calls it).
I will say that this book may be a bit advanced for beginners. Beginners should start with Bill O'Neil's How to Make Money in Stocks and then jump to Morales & Kacher's "Disciples" book... then this book. While you certainly could start with this book, I think it will really resonate with someone who has a bit more experience. In my opinion, it takes some real life pain and experience with this methodology to really appreciate the details and lessons of this book.
With that said, if you are someone (like me) who has been doing O'Neil / IBD-style investing for the past few years and you are looking to really tighten up your rules and discipline, this book couldn't come at a better time. Their rules bring clarity and specifics that help you decide when to buy and, more importantly, when to sell.
A huge section of the book walks you through specific examples of pocket pivots and buyable gap ups to try to help speed up the learning process. You look at a blank chart to try to mark it up on your own and the the authors' markups are on the next page. This is one reason I would recommend the hardcopy book over the eBook version.
Product Details :
Hardcover: 432 pages
Publisher: Wiley; 1 edition (December 26, 2012)
Language: English
ISBN-10: 1118273028
ISBN-13: 978-1118273029
Product Dimensions: 5.9 x 1.3 x 9.8 inches
More Details about In The Trading Cockpit with the O'Neil Disciples: Strategies that Made Us 18,000% in the Stock Market, Wiley Trading, 1st edition
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