Trade Like an O'Neil Disciple: How We Made 18,000% in the Stock Market (Wiley Trading)

386 Pages·2010·15.79 MB·English

by  Gil Morales

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Trade Like
an O’Neil
Disciple
i
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Trade Like
an O’Neil
Disciple
How We Made Over 18,000% in
the Stock Market
GIL MORALES
AND DR. CHRIS KACHER
JohnWiley&Sons,Inc.
iii
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Copyright(cid:1)C 2010byGilMoralesandChrisKacher.Allrightsreserved.
PublishedbyJohnWiley&Sons,Inc.,Hoboken,NewJersey.
PublishedsimultaneouslyinCanada.
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LibraryofCongressCataloging-in-PublicationData:
Morales,Gil,1959–
TradelikeanO’Neildisciple:howwemadeover18,000%inthestockmarket/
GilMorales,ChrisKacher.
p.cm.–(Wileytradingseries)
Includesindex.
ISBN978-0-470-61653-6
1.Stocks. 2.Speculation. 3.Portfoliomanagement. I.Kacher,Chris. II.Title.
HG4661.M5972010
332.63(cid:2)22–dc22
2010013522
PrintedintheUnitedStatesofAmerica.
10 9 8 7 6 5 4 3 2 1
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Itissaidthatdedicatingabookisoneofthemostexquisite
actsofloveonecanperform.Iloveallwhoseekoutandfind
theirpassioninlifeandinspirit,whichincludethoseclosest
tome,youknowwhoyouare.
—ChrisKacher
Fortheotherridersinmybumpercaroflife:Linda,
Claire,andAlex,andforthetwopeoplewhoareresponsible
forsettingmeoffonthisbumpercarride:
myparents,BobandIrene.
—GilMorales
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Contents
Foreword xi
Preface xiii
Acknowledgments xvii
CHAPTER 1 The Evolution of Excellence:
The O’Neil Trading Method 1
Preparation,Study,andPractice 2
BuyExpensive—NotCheap—Stocks 4
AveragingDown 5
CuttingLossesQuickly 5
TakingProfitsTooSoon—LettingYourWinnersRun 6
PositionConcentration 7
DealinginBigStocksandInstitutionalSponsorship 8
ChartPatterns 9
PivotalPointsversusPivotPoints 12
TimingtheMarket:WhentoBeIn,WhentoBeOut 13
EmotionsandPredictions 14
ListeningtoOpinions,News,andTips 15
Overtrading 16
TheO’NeilApproach:Techno-Fundamentalism 17
Conclusion 17
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viii CONTENTS
CHAPTER 2 How Chris Kacher Made Over
18,000 Percent in the Stock
Market Over Seven Years 19
GainingaFootholdintheBusiness 20
1996—“Y2K”StocksPutMeOvertheTop 22
1997—KeepingProfitsduringtheAsianContagion 27
1998—DemoralizationSetsInJustBeforetheMarket
TakesOff 29
1999—TheBubbleExpands 31
2000—TheBubbleBursts 35
2001—ALessoninShorting 37
2002toPresent—Choppy,SidewaysMarketsandtheBirth
ofthePocketPivot 39
CHAPTER 3 How Gil Morales Made Over 11,000
Percent in the Stock Market 43
ARockyStartTurnsGolden 44
ClimbingonBoardtheRocketRide 46
Joiningthe1,000PercentClub 49
OracleBubblesUp 50
PatienceandaWatchfulEye 53
ClearedforTake-Off 54
Verisign:The“SpiceintheSoup” 56
SittingNotThinking 60
ClosingInontheTop 62
TheThemeofSuccess 64
TheSecretIngredients 65
CHAPTER 4 Failing Forward 67
ThePsychologyofSuccessLiesinTamingtheEgo 68
LearningfromOurMistakes 72
Problems,Situations,andSolutions 107
Conclusion 125