William O’Neil’s 23 Trading Rules

William J. O’Neil (born March 25, 1933) is an American entrepreneur, stockbroker and writer, who founded the stock brokerage firm William O’Neil & Co. Inc in 1963 and the business newspaper Investor’s Business Daily in 1984. He is the author of the books How to Make Money in Stocks, 24 Essential Lessons for Investment Success and The Successful Investor among others.

William J. O’Neil is one of the greatest stock traders of our time, achieving a return of 5000% over a 25-year period. He uses a trading strategy called CANSLIM, which combines fundamental analysis, technical analysis, risk management and timing.

CANSLIM is an acronym and stands for:

C: Current quarterly earnings per share (up at least 25% vs. year-ago quarter).

A: Annual earnings increases at a compound rate of no less than 25%.

N: New products, new management and new highs.

S: Supply and demand. Stocks with small floats experience greater price rises, plus big volume demand.

L: Leaders and laggards. Keep stocks that outperform and get rid of the laggards.

I: Institutional ownership. Follow the leaders.

M: Market direction. Three out of four stocks follow the trend of the market. When the intermediate trend is bearish…