The CANSLIM approach to Trading Stocks.

Updated: Nov 19

Using the method designed by William O'Neil - Investors Business Daily (IBD)

In our previous video looking at Edge & Probability in trading, the following system can be applied to create such an edge. My personal approach differs in regard to it being a Breakout Strategy based on Quality stocks. Nonetheless many use the follow CANSLIM method often accompanied by the Cup & Handle setup to move the odds of success into their favour.

The Canslim Approach to Trading Stocks

Many great traders have taken inspiration from William O’ Niel, either by directly working with him, through his books, or through numerous communications from his company’s subscription service – Investor's Business Daily, which has since been acquired by News Corp.

William O'Neil has beautifully put in place a trend-following system - CANSLIM, which many traders have picked and tweaked to shape their own trading style. The system is not only helpful in trading but can also be used as an investing tool.

We discuss the basics of CANSLIM in this article by breaking down the components of the strategy and their importance shortly.

I found this performance chart to see how the strategy has performed to date (2022). The top blue line represents the original system and the bottom red line shows the S&P 500 as a benchmark.

Here we have the annualised returns from 2007.

For those who would like to see my previous video on the approach with more technical guidance (Cup & Handle) and book reviews, see the below videos.

CANSLIM Summary:

– Current Earnings