How to Make Money in Stocks: A Winning System in Good Times and Bad, Fourth Edition

High, Tight Flags Are Rare A “high, tight flag” price pattern is rare, occurring in no more than a few stocks during a bull market. It begins with the stock moving generally 100% to 120% in a very short period of time (four to eight weeks). It then corrects sideways no more than 10% to 25%, usually in three, four, or five weeks.

Steve Birch, another of our in-house money managers, started managing money earlier. He took advantage of the roaring bull market of the late 1990s and protected most of his gains by going mainly to cash in the bear market. Between 1998 and 2003, he had gained over 1,300%.

“There are no secrets to success,” said General Colin Powell, former secretary of state. “It is the result of preparation, hard work, and learning from failure.”

If you don’t sell early, you’ll be late. Your object is to make and take significant gains and not get excited, optimistic, greedy, or emotionally carried away as your stock’s advance gets stronger. Keep in mind the old saying: “Bulls make money and bears make money, but pigs get slaughtered.”

following all of my selling rules had automatically forced me out of every stock. I was 100% in cash, with no idea the market was headed for a real crash that spring. This is the fascinating thing: the rules will force you out, but you don’t know how bad it can really get. You just know it’s going down and you’re out, which sooner or later will be

Sell when there’s a great deal of excitement about a stock and it’s obvious to everyone that the stock is going higher. By then it’s too late. Jack

Heaviest daily volume. The ultimate top might occur on the heaviest volume day since the beginning of the advance.

the base pattern has a wide spread between the week’s high and low points every week, it’s been constantly in the market’s eye and frequently will not succeed when it breaks out.

Therefore, you should apply your CAN SLIM system and select the best possible stock at the best possible time.