Overview: How To Make Money In Stocks, How to earn profit from a stock, Conclusion
As a view of financial experts, the stock market is one of the wealth-building instruments for long-term investment.
As we know stock grows exponentially in value over the year but you can not track day to day movement of any stock with total accuracy.
Every stock investor wants to book profit from stocks and enhance the portfolio value. In this reference, newbie or even experienced investors always need to learn in the stock market because the stock value is rapidly changing.
Even small news can down or increase the price of stock and investors should have good knowledge of the business so they can pick a good stock.
“How to make money in stocks” book is written by the famous stock investor, writer and businessman Mr. William O’Neil. Here, we discuss the strategies of this book.
Author William shares the two important strategies in his book, the first strategy is CANSLIM and the second one is Cup and Handle stock chart patterns.
Table of Contents
Strategy 1: CANSLIM
CANSLIM: is a process of Investing in a system to pick the best stocks for better profit. Everyone wants to book profit in the stock market but to book profit first one should need to pick a good company.
CANSLIM is a process of stock investment that newbie or even experienced investors can use to make money or book profit in the stock market by picking good stocks.
One of the famous studies reveals that investor which use the CANSLIM strategy book 12% more profit rather than other investors.
CANSLIM word, every letter describes specific parameters to implement the strategy, now we describe every letter in detail so the investor can understand and implement this strategy.
C -» Current Quarterly Earning Per Shares ( EPS )
A -» Annual Earning
N -» New Products, Management
S -» Supply and Demand
L -» Leader
I -» Institutional Sponsorship
M -» Market Direction
This CANSLIM model is a mixture of technical and fundamental analysis, Based on this model investors can maximize their profit in the stock market.
CANSLIM model provides seven characteristics and investors should only follow these seven steps to pick good stocks and maximize their profit.
- Better quarterly result earning per share.
- Increase annual earning from last 3 years.
- New development in product and management.
- High in Demand.
- Choose an industry leader.
- Minimum institutional sponsorship.
- Market direction ( Stock should be in uptrends for buying ).
Strategy 2: Cup and Handle Chart Pattern
Learning about stock chart patterns is an amazing benefit in the stock market if you want to earn money from the stock market. Reading the chart patterns comes under the technical analysis of the stock.
Below is the cup and handle chart patterns in the picture the big depth denotes the Cup and the small denotes the handle.
Generally, when a cup hand handle pattern makes by any stock along with great financial that indicates the stock definitely bullish at the same point of maximum depth of the cup.
This means if a stock makes a cup and handle pattern and the cup maximum depth is 500 points then the stock will definitely be bullish 500 points.
So How to make money in stocks is not too much complicated if you learn regularly and experience the stock market. If you understand the business then you learn half of the stock market.
How To Earn Profit From a Stock
There is a number of strategies to earn profit from stock or the stock market, some are listed below.
- You should know the three things before investing in the stock market first is identify an entry point second is set a stop loss and last know your target price or exit point.
- Do proper market research before investing in a stock, research in the sense of fundamental analysis, and technical analysis and check the past record of the company related to doing isn’t get caught in any scam.
- Investing for long terms in good companies provides benefits always.
The stock market goes up and down regularly, so you have to be patient if you want to make money in the stock market.
Good company’s shares give multi-bagger returns if you invest your money in the long term.
The stock market gives you an opportunity to invest your money wisely and multiple your capital without doing anything, you have only keep patience and diversified investments.
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