Watching this, I'm able to understand it 50/50. Seems like there's always a learning curve but I know that it will be worth it. Better to have and not need, to need and not have.
I've learnt a lot from CANSLIM, however, I don't think that you can generalise a RR from O'Neils charts as those presented are both selective and the result of survivorship bias. In no case are failures emphasised. This is common to most trading books ... Anyway back to RR. The reward part can only be guestimated in advance; it is easy to look at any historic chart that moves from the bottom left to top right, 'see' consolidation patterns, and declare them tradable on a breakout. What you've found subjective is probably the result of this occurring. However, I found the video very useful as I've stared at many of the examples and thought - 'nope, just don't see that'. Consolidation & tight closes (volatility contraction) are useful setups that seem to be associated with sharp moves. A breakout in the direction of prevailing relative strength helps with the correct direction.
Hi Andrew - You make some very valid points. Your are right in regard to the survivorship bias, this was the main reason for the Monte Carlo Simulator example to show that you could be out of the game if you hit too many losses aligned to the account risk taken. Of course to determine a strike rate you need to have back tested to get that conclusion, hence as you say it can only be guesstimated. RR is by default subjective due to not knowing the 'true' reward in advance. Glad you found it useful if only to conclude the findings of the book flawed, as did I to some degree.. Thanks for the detailed reply, much appreciated.
🖕It's really nice meeting you here and I'm very willing to teach you about trading,coach you on how to invest and work with you dealing on cryptocurrencie
If I’m not mistaken, the RR multiples would have been way more. In TASR example buying a BO at approximately $4.4 with 8% stop loss and selling at $108 is a 296RR trade. Only risked 35c for over $103 gain. Love the videos btw
That's exactly what I came here to say. For an $800 risk out of a $10000 account you would be buying approx 1142 shares at the buy point of $4.40 and selling at $108 and would rake in a gain of $123,108 not $18,400. Other than that, loved this video and the others I've watched - explains the books really well and very entertaining as well.
You didn't cover the take profit part much at all. It's extremely difficult to sell at the top so you're risk reward figure are inflated and assumes that you sell at the near top everytime
Hi Tiny, you are absolutely right, the risk reward figure should only be established retrospectively, although you can estimate it based on the structure of the market i.e an historical resistance line. Personally I use my historical data to confirm long term RR expectations. Apologies if exits were not covered in this video, I try to take out key points that the book offers.👍
Thank you for giving a rather great summary of the first hundred or so pages, this has incentivized me to continue to read the rest of the book. My first time here and I’m enjoying the channel. Thank you for the hard work!
Great summary! Thanks for your value creation. I have a question. What are your top three books you would recommend someone who would like to trade mid and long term in the market? Thanks again.
Good Video, as obvious. Thank you for your efforts, Sir. Your Intro Music on this Video was so astonishing to me, it just reminded me on the 80's, BloodSport the Movie, The Kickboxer and so many more of those great Films right out of my Childhood. Keep on Going, you created a very beautiful, nice and very informative while still understandable Channel. I really appreciate it. Keep the Good Up, and see you on the other side
As you stated the JDS graph actually shows what looks like “cup n handle” quite a ways Before the one 0’Neil chose. If one had used it they would have made a profit up to the one O’Neil used. Qualcomm is subjective with multiple “cup n handles”. I will pass on ONeil
Those cup handle patterns here look super messy - sometimes just a tiny handle, or a small cup handle overall followed by a long, massive rallye that makes the cup handle look tiny and irrelevant. Wondering what the general hit ratio of that pattern is nowadays..
I’m confused on your rewards to risk numbers… you keep saying $800 risk for a $24,000 (yahoo example) return. But if the stock returned a 32x on $10k that would be $320,000… what is the $24,000 figure?
Thanks for the video. I believe this trading way not easy to be screened easily. You need to give a hard work to establish a trading plan. Also cup and handle in weekly charts maybe not observed so much but when it is happen it could be effective. Thanks for the work FW!
you probably dont give a damn but does any of you know a tool to log back into an instagram account?? I somehow lost the password. I appreciate any assistance you can offer me
Many thanks Gareth. I've always found the cup and handle pattern rather difficult to spot in real life - maybe because a proper one is quite rare, and also it's more complex than other chart signs, not to mention the element of subjectivity to which you allude. I shall start looking again.
You should read Mark Minervini - "Trade like a Market Wizard". His VCP concept explains the charakteristic of a correct Cup with handle and where it´s works best. They are not that rare. After the Corona Crash there were dozens that worked and more are building up right now.
If tge left side of chart had much higher prices months back as price rises the stock price can hit a ceiling even though coming off cup and handle. I prefer long flat bases of brand new stocks.
@@FinancialWisdom I digest the videos but all people who use this system don't tell about which are the screener associated. It's like if you sell a car without the keys.
🖕It's really nice meeting you here and I'm very willing to teach you about trading,coach you on how to invest and work with you dealing on cryptocurrencie
I would probably go 4, its a great book to learn a specific strategy. I have stopped rating them because I could 'apparently' be liable for not scoring books accurately.....🤐
Hi Chewie, I suggest an objective stop, either a downside break of (obvious) support or perhaps a closing below a certain moving average, my preference is the crossing of the MACD on the weekly chart. Of course its a trade off between the willingness of losing some profit in the hope you eventually gain more profit (rosk reward).
@@FinancialWisdom had a big drop on CRM recently. It’s like cutting your losses or I plan on keeping for the long run and selling calls against it (but yet again, cutting off my upside potential). Great videos. Thanks for sharing and creating valuable summaries of great traders.
@@chewie1355 Thanks Chewie, yes its a trade off... the tighter the risk management often the less the reward but less risk, the looser the risk management often more reward but more risk. My approach is hybrid and includes fundamentals as well as technical, therefore i use weekly charts and allow for short term drawdown but with greater reward.
🖕It's really nice meeting you here and I'm very willing to teach you about trading,coach you on how to invest and work with you dealing on cryptocurrencie
Personally i dont use a target price, I look for a change in momentum, a target price IMO stunts risk/reward and this is the foundation of a great strategy.😉
If I could give some feedback. I prefer to hear the content of the guys book rather than your opinion if it's useful or not no offence. Have a listen to the Swedish investors take on investing books
My p0rtfolio is plummeting significantly, I’ve lost about $320k within a few months and I'm not confident about picking st0cks anymore. Are there really no other options for me to gain from the stock market?
Very true. Despite having no prior investing knowledge, I started investing before the pandemic and pulled in a profit of approximately $950k that same year. In reality, all I was doing was getting professional advice.
There are a lot of independent advisors you might look into. But i work with Nicole Desiree Simon , and she is excellent. You could proceed with her if she satisfies your discretion. I endorse her
I just looked her up on the internet and found her webpage with her credentials. I wrote her a outlining my financial objectives and planned a call with her.
Some of your content is excellent, but basing a RoR based on the assumption you “sell at the top” should raise serious eyebrows. At least base it on some kind of market structure change
Hi - This is purely theoretical for simplification, you are right real life would need specific rationale. But of course we do not know this in advance therefore we are always using assumptions, when we are at the far right of the chart everything is an assumption.
I don't think any of the analysis made sense, let alone the fact that how one would have picked such stocks. You can look at any correction and say it's a cup and handle. I hope the book would contain more info.
R:R calculation is false. on invested 10000$ x 630% = 63000$ , stop 800$ so R:R is = Net profit (63000$) / Risk taken ( 800$ ) = 78.75 R. there's no point that on 10000$ investment stock moves 630% and profit is 15200$ .
This content is filled with groundbreaking revelations. I discovered a book with like themes that transformed my outlook. "Mastering Money Mindfulness" by Benjamin Hawk
