Summary of Gil Morales & Chris Kacher's In The Trading Cockpit with the O'Neil Disciples

By IRB Media

Please note: This is a companion version & not the original book. Book Preview:

#1 One of the most fundamental principles of trading and investing is that you should select and stick with a methodology that suits your personal psychological makeup. The OWL ethos is based on the investing philosophies of three great traders: William O'Neil, Richard Wyckoff, and Jesse Livermore.

#2 A shopping expedition is when you go shopping for stocks when they are the cheapest. A hobby is when you dabble in the markets and thus avoid the stress of getting overly involved. A business is purchasing raw materials at cost and developing those materials into high-demand products that can be sold at a price much greater than the cost.

#3 The four types of tips are: a. The tip sounds good yet in reality it may be outside your particular trading discipline and strategy. b. The tip is a false rumor. c. Tips usually turn out to be false, but if you take one tip thinking it is true and you end up making money on it, you may be more likely to take tips in the future.

#4 There is satisfaction in out-thinking the market, but there are many variables that can change between now and the future that can throw off your prediction. The best way to predict the future is to focus on what the market is telling you now, today.

• Language: English
• Publisher: IRB Media
• Release date: May 5, 2022
• ISBN: 9798822503199

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Insights on Gil Morales & Chris Kacher's In The Trading Cockpit with the O'Neil Disciples

Contents

Insights from Chapter 1

Insights from Chapter 2

Insights from Chapter 3

Insights from Chapter 4

Insights from Chapter 5

Insights from Chapter 6

Insights from Chapter 7

Insights from Chapter 8

Insights from Chapter 1

#1

One of the most fundamental principles of trading and investing is that you should select and stick with a methodology that suits your personal psychological makeup. The OWL ethos is based on the investing philosophies of three great traders: William O'Neil, Richard Wyckoff, and Jesse Livermore.

#2

A shopping expedition is when you go shopping for stocks when they are the cheapest. A hobby is when you dabble in the markets and thus avoid the stress of getting overly involved. A business is purchasing raw materials at cost and developing those materials into high-demand products that can be sold at a price much greater than the cost.

#3

The four types of tips are: a. The tip sounds good yet in reality it may be outside your particular trading discipline and strategy. b. The tip is a false rumor. c. Tips usually turn out to be false, but if you take one tip thinking it is true and you end up making money on it, you may be more likely to take tips in the future.

#4

There is satisfaction in out-thinking the market, but there are many variables that can change between now and the future that can throw off your prediction. The best way to predict the future is to focus on what the market is telling you now, today.

#5

The idea that one should seek to invest in those stocks that are on the cutting edge of economic developments is called the cutting edge theory.

#6

The O'Neil- and Livermore-style investing focuses on locating and getting positioned for rapid price movements in stocks. The emphasis on the biggest winning stocks in any market cycle helps keep one's focus on those stocks that have the best potential for rapid upside price action.

#7

The O’Neil methodology is derived from the investment philosophies and writings of Richard D. Wyckoff and Jesse Livermore. It is based on the principle that the market provides a ready feedback mechanism for accessing facts on the ground.

#8

The OWL methodologies promote a stop-loss rule of 10 percent. While it may surprise you how often you are right, your so-called hit ratio is not a factor in investment success. In 1995, Gil Morales was down over 30 percent after being wrong several times in a row. It was not until he found C-Cube Microsystems that he was able to make huge profits in excess of 500 percent.

#9

The O’Neil method is to sell when your stock drops 7 to 8 percent from your purchase price. However, one can buy a pivot point 5 percent above the actual pivot point buy price, which means you could be required to sit through as much as 13 percent of downside if O’Neil's studies are correct in that winning stocks rarely pull back more than 7 to 8 percent from