Get rid of all the stupid indicators out there
One of the quotes that stood out for me was something that I have been reading and hearing a lot.
Dan says, “Get rid of all the stupid indicators out there. All this MACD stuff, this Volume Accumulation stuff and Money Flow. I don’t use any of it. It’s totally worthless. It’s Price Action, it’s Volume, it’s chart patterns, it’s spectacular earnings. And that’s all there is.”
Dan’s main reference book is How to Make Money in Stocks by William O’Neil (who founded the business newspaper Investor’s Business Daily).
Also, he says not to buy a stock just because it’s inexpensive. You want to find the market leaders which are dominant in their space, with quarter-over-quarter increases, those that are producing new products and services, with new management. Basically, it’s the CAN-SLIM formula by O’Neil.
Dan uses the CAN-SLIM formula along with his own chart pattern and key-reversal bars to enter and exit a stock.