Some investors guess. Others follow headlines. But smart investors follow systems, and one of the most enduring systems out there is William J. O’Neil’s CAN SLIM method published in 1988.
Made popular through his bestselling book, How to Make Money in Stocks: A Winning System in Good Times and Bad, O’Neil’s approach is built on studying winners, stocks that posted big gains before the crowd caught on. What he found is that winning stocks tend to share certain qualities. CAN SLIM distills those into seven clear traits.
This guide breaks it down step by step. More importantly, it shows how investors today can apply those same principles in a volatile market environment.
CAN SLIM isn’t guesswork. It’s a seven-part checklist built from decades of historical stock data. Each letter represents a key trait found in market leaders:
The market has changed. But the habits that drive it haven’t. Greed, fear, overconfidence, those don’t disappear. O’Neil’s system is rooted in human behavior. That’s why it still works.
In a year where rate policy is uncertain and tech is making a comeback, CAN SLIM gives investors a disciplined framework to find momentum stocks and avoid the noise.
Start with the Numbers
Use a screener to filter stocks with at least 20% earnings growth, both quarterly and annually. The strongest names usually show this kind of momentum before they take off.
Look for “New” Catalysts
Pay attention to company announcements. Whether it’s a product launch, a leadership shakeup, or entry into a new market, the “N” in CAN SLIM is often what starts the breakout.
Watch the Volume
Rising prices on rising volume tells you institutions are stepping in. That’s your signal. Don’t chase low-volume rallies, they tend to fade.
Respect the Trend
The “M” in the system matters. If the overall market is in correction, sit tight. It’s easier to make money when the wind is at your back.
Most people lose money in the market not because they lack information, but because they lack a plan. O’Neil outlined common traps that destroy portfolios:
Avoiding these is just as important as following the rules.
There’s no shortage of opinions out there. But few strategies are built on a century of data, and still hold up.
CAN SLIM is for traders and investors who want structure, clarity, and results. It filters out noise and focuses attention where it matters: earnings, leadership, volume, and timing.
The name of the book says it all, How to Make Money in Stocks: A Winning System in Good Times and Bad. The markets won’t always cooperate. But with a repeatable process, you won’t need to guess.
If you’re serious about growing wealth through stocks, this is a system worth learning and keeping in your back pocket, regardless of what the headlines say.
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This post was last modified on Jul 15, 2025, 18:51 BST 18:51