Unlocking the Secrets of Making Money from the Stock Market: Expert Strategies for Financial Success

15 Price Action Patterns Insiders are Using If a hedge fund managers were using 15 specific price action patterns would you want to know?

Anyone can learn what making money from the stock market is like temporarily, but the secret to successful investing requires a consistent, comprehensive trading strategy. In this beginner’s guide to the stock market, we’re going to reveal the missing ingredients on how to make money in the stock market fast.

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There are many innovative methods for you can learn about how to make money in the stock market for beginners. Stock trading guru William J O’Neil has developed an innovative method known to the general public as the CANSLIM formula to help them build wealth.

As bestselling author William O’Neil published in 1988, the notorious How to Make Money in Stocks book sold more than 2 million copies worldwide. William O’Neil studied the performance of stocks in the last 125 years to come up with a comprehensive trading strategy to make money in the stock market.

The main takeaways from his book can be summarized into three factors:

  1. Timing
  2. Trading
  3. Stock chart reading
How To Make Money From The Stock Market
How to make money in the stock market

If one can master these three components of trading, one will have a better chance of becoming a profitable stock trader.

Before revealing the CANSLIM investing system, we’re going to teach you making money from the stock market beginners.

Making Money From the Stock Market for Beginners

There are two ways to make money from the stock market:

  1. Dividends
  2. Growth
Making Money From The Stock Market Fast
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When you buy stocks in a company you become a part-owner of that company. As a part-owner of that company, you are entitled to a share of the profits the company produces. Companies will pay out part of their profits to the shareholders in the form of dividends. With dividends, you can accumulate wealth without needing to exit any of your positions.

Let’s say, for example, we have a company that pays a $1 dividend per share and you own 1000 shares. You are going to receive $1,000 every single year, for as long as you own those shares and as long as the company continues to pay dividends.

If the stock doesn’t have dividends then how does a stock make you money?

The answer, in trading lingo, would be a growth stock. The term is self-explanatory. You want a stock to grow in price and its market value to increase over time. For example, if you buy ABC stock for $5 per share, as time goes by, you want the ABC stock to be more than $5 per share to make a profit. The more the stock can grow, the larger your profits will be.

Also, learn about the rules of the stock day trading game with our Day Trading Rules Under 25k Guide.

How To Make Money In The Stock Market
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Contrary to conventional wisdom, you don’t need deep pockets to invest in the stock market.

But, let’s see how much money do you need to start investing in stocks.

See below:

How Much Money Do You Need to Invest in Stocks

Pragmatically speaking and depending on how much risk you’re willing to take on, you can invest as much as your financial situation allows you. However, depending on your trading style there is a minimum capital requirement imposed by the US regulatory bodies that you have to maintain in your account.

For example, if you’re a stock day trader, then you need to hold a minimum account balance of $25k. According to FINRA, the Financial Industry Regulatory Authority in the US, a pattern day trader must keep a minimum account balance of $25,000 on any day if your day trades four or more times in five business days.

If you’re investing in stocks, there is no minimum capital requirement. Some stockbrokers even have a $0 account minimum.

For example, Robinhood is a free, US-based stock trading app that allows 100% commission-free stock, options, cryptocurrency, and ETF trades. This guide will teach you everything you need to know about Robinhood so you can trade effectively: Robinhood App Trading Guide (Everything You Need to Know).

You don’t have to have big money if you want to buy stocks. Willian O’Neil started his first stock investment with only five shares of P&G. He eventually expanded his efforts and earned regular incomes through dividends and growth.

On the other hand, if you trade penny stocks you can start with as little as $100.

In this step-by-step guide, you’ll learn how to trade penny stocks for beginners.

The bottom line is that if you want to start buying stocks and build your stock portfolio you don’t need a crazy amount of money.

Let’s now see how you can make money in the stock market using the CANSLIM investing system.

What’s the Best Stock Market Strategy?

How To Make Money In The Stock Market For Beginners
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The best stock market strategy was developed by investor William O’Neil. The CANSLIM method uses a combination of technical and fundamental analysis to help you pick the best stocks. Technical analysis involves using raw data. Fundamental analysis involves paying attention to the news. This strategy promises not just to make you money but has the potential to generate higher returns.

Nowadays, stock picking has become extremely difficult with the market trading near its all-time high. However, by using a combination of both technical and fundamental analysis, you can increase your chances of success.

Technical indicators are great tools that provide attractive entry and exit points. At the same time, fundamentals provide you with a framework to pick the best stocks.

This day trading tutorial will break down the general principles and the best way to pick stocks.

Now, how does the CANSLIM strategy work?

The CAN SLIM acronym can be divided into 7 parts that can help you pick high-growth stocks. Each letter corresponds to a particular criterion that a stock must satisfy to be considered a good candidate for an investment opportunity.

The CAN SLIM trading system can also be divided into two major sections:

  1. CAN – This is a fundamental methodology that uses quantitative criteria to pick high-growth stocks.
  2. SLIM – This is a technical analysis method that studies the price chart of the stock.

Now, let’s break down the CAN SLIM acronym letter by letter:

  • C (Current Quarterly Earnings) – Here we should look at the earnings growth over the last 3 quarters. William O’Neil likes stocks with at least 25% growth. If you see earnings consistently accelerating quarter by quarter, the chance of the stock going parabolic increases considerably.
  • An (Annual Earnings) – According to William O’Neil, we should see at least 25% annual growth accompanied by at least 17% ROI.
  • N (New Products) – A company should change from time to time. These changes can include new products, new services, new leadership, and new pricing to help push the company’s stock to new highs. Any company’s growth needs to push for new products, new management, and new events. O’Neil discovered that almost 95% of his top stock picks had experienced something new.
  • S (Supply and Demand) – We should look for stocks with heavy accumulation by smart money investors. If you see a resistance breakout go hand in hand with lots of buying activity that can be measured by reading the volume indicator, you can be sure there is a shortage of supply.
  • L (Leader or Laggard) – In CAN SLIM analysis, it’s key to know the stock leaders and laggards in each sector. O’Neil suggests buying stocks that are leaders in their industry or sector. The idea here is to distinguish between the stock leaders and stock laggards. According to the CANSLIM stock trading investment strategy, a market leader is any stock that has its 52-week relative price strength outperforming 80% of the market sector.
  • I (Institutional Sponsorship) – It means that the hedge funds and smart money are buyers of the stock you’re interested in. However, this support from institutional players should be limited to 3 to 7 owners. If the stock has too many institutional investors, any bad news may lead to heavy selling.
  • M (Market Direction) – You have to trade in sync with the general market direction. More than 70% of the stocks move in tandem with the direction of the market. You must be aware of the market trend, which William O’Neil breaks it into three stages: uptrend, downtrend, and uptrend under pressure. Focus on buying stocks that move in strong uptrends and don’t even bother with a downtrend.

The CAN SLIM trading strategy also has some subjective elements attached to it. Timing the market and finding appropriate entry and exit points may come down to your chart reading skills. However, fine-tuning your entries doesn’t matter in the big picture, especially if you pick a winning stock.

Let’s now look over simple ways how to make money in the stock market fast.

See below:

How to Make Money in the Stock Market Fast

How To Invest And Make Money Daily
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We know it’s your dream to learn a method of how to make money in the stock market fast. This is almost every stock investor’s dream. Becoming the next Oracle from Omaha won’t happen overnight.

What’s the fastest and easiest way to make money on the stock market?

We’re going to outline the steps you need to take to make really fast gains in the stock market. This is how you need to run your share portfolio if you want to get rich quickly in the stock market.

Note* some of these stock trading tips involve the risk of potentially losing money.

#1 Increase Your Risk

The first step you need to undertake to set yourself up to make quick gains in the stock market is to increase your assumed risk per trade. While you’re opening yourself up to potential drastic growth, at the same time you’re opening yourself up to losing a big portion of your trading capital. Still, anyone who hopes to make money in the stock market will need to be willing to take some risks.

#2 Increase your Trading Capital

The second thing you can do to make money fast in the stock market is to invest as much money as you can. If you’re trying to get rich quickly, then you need to have a big working capital to be able to buy more shares and consequently increase your potential profits.

#3 Picking Stocks with Big Growth Potential

The third thing an investor can do to earn big money from buying stocks is to pick a stock that has the potential to have game-changing growth. Look for stock that is going to create such a product or service that it’s going to be a sector game-changer. Remember, you’re not trying to pick stocks that are already valuable. You’re trying to pick stocks that are likely to increase in value. Be sure to read this guide on Penny Stock Trading.

#4 Pick Stocks that Don’t Pay Dividends

The fourth factor to consider is to have in your portfolio companies that don’t pay dividends. If the stock you buy pays dividends it means some of the profits made are given to shareholders and not reinvested in the company. If you want the stock you bought to grow drastically, you want a company to reinvest its profits into its own business to grow it as quickly as possible. Dividend stocks have a much slower growth process. They are usually mature stocks whose values are much less volatile.

#5 Research Small Caps

Small Cap Stocks that have the potential to become mid or even large-cap stocks can increase your profitability tenfold. Finding good companies with good financials and long-term growth potential will help you discover these types of investments and jumpstart you into profitable overdrive. Check out smallcapsdaily.com for great news and information on biotech, cannabis, pharma, tech, and more. Find potential 100x gainers by doing individual research.

Bonus Strategy: Dollar Cost Averaging

In the world of stock trading, one strategy stands out as a reliable ally for investors of all levels: Dollar Cost Averaging (DCA). But why is it so valuable?

DCA is the practice of regularly investing a fixed amount of money into a stock, regardless of its current price. This method allows you to buy more shares when prices are low and fewer when prices are high. Here’s why it’s a game-changer:

  1. Risk Mitigation: DCA helps spread risk over time. Since you’re not putting all your money in at once, you’re less vulnerable to market volatility.
  2. Emotionally Stable: It takes the emotion out of trading. You’re not trying to time the market, which can be stressful and often leads to poor decisions.
  3. Consistency Wins: DCA enforces discipline. By investing regularly, you build a consistent habit that can lead to long-term wealth accumulation.
  4. Capitalizes on Dips: When the market dips, DCA allows you to buy more shares for the same amount of money, potentially maximizing returns in the long run.
  5. Long-Term Gains: DCA is a strategy for the patient investor. Over time, it can smooth out market fluctuations and lead to substantial gains.

Let me share a real-life example that vividly illustrates the power of Dollar Cost Averaging (DCA) in the world of stock trading.

Meet Casey Stubbs, a dedicated trader and founder of Trading Strategy Guides. He teaches traders how to make money in the stock market.

A few years back, Casey decided to invest in Coinbase, a leading cryptocurrency exchange, when the price was at $303.71 per share. He believed in the long-term potential of the crypto market and was ready to commit to his investment strategy. Casey’s journey with Coinbase was about to take a rollercoaster ride.

In the months that followed, the price of Coinbase shares didn’t behave as expected. It dropped steadily, reaching as low as $31 per share. Under normal circumstances, this would have been a substantial loss, so let’s calculate it: ($303.71 – $31) = $272.71 per share loss. It seemed like a massive setback.

However, Casey was not your typical investor. He had faith in the power of DCA. Over the next three years, every month, without fail, he continued to invest in Coinbase, no matter the price. Sometimes he bought shares for as little as $33 each. His dedication to this strategy was unwavering.

As time passed, something remarkable happened. Because Casey kept adding to his Coinbase holdings, the average cost of his shares began to decrease. He wasn’t just buying low and holding; he was consistently lowering his average price. His persistence paid off, and his average cost per share dropped to just $77.

Then, the market started to show signs of recovery. Coinbase’s share price climbed steadily, eventually reaching $100 per share. For most investors, this would be a modest gain. But for Casey, it was a significant victory. Let’s calculate his profit: ($100 – $77) = $23 per share profit.

Incredible as it may seem, Casey turned a situation that could have resulted in a loss of over $200 per share into a $23 per share profit, all thanks to the power of Dollar Cost Averaging. It wasn’t about timing the market or making quick gains. It was about consistency, perseverance, and a belief in the long-term potential of his investment. This is a great example of how to make money in the stock market.

Unlocking The Secrets Of Making Money From The Stock Market: Expert Strategies For Financial Success
Snip dollar cost averaging tracker casey stubbs google sheets brave 2

The Above Image is based on an investment in COIN if you Purchased in one lump sum. Down $72,000 OUCH!

Unlocking The Secrets Of Making Money From The Stock Market: Expert Strategies For Financial Success
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This graph shows what your COIN investment would look like if you added $1000 per week. You can see how much better off the investment performs if Dollar Cost Averaged.

This story serves as a testament to the effectiveness of DCA in helping traders and investors navigate even the most challenging market conditions and ultimately achieve their financial goals.

In essence, Dollar Cost Averaging is a steady, reliable approach to stock trading that can help you navigate the unpredictable seas of the market with confidence. So, remember, it’s not about timing the market; it’s about time in the market. Start your DCA journey today for a brighter financial future. Make sure you pick the right stock that fits the canslim description we mentioned above. Because if pick the wrong stock you will not learn how to make money in the stock market.

Final Words – How to Make Money in the Stock Market

In summary, keep in mind that the stock market is a reliable source of long-term wealth creation. However, you can also learn how to make money in the stock market fast if you’re willing to accept the risk. Even though there are many ways to make money in stocks you also have to have realistic goals. Even though you can hope for the best from your stock investments, ultimately the stock market has the final word.

Our guide on how to make money in the stock market for beginners recommends you invest your money with a disciplined approach if you want to generate income streams. Also, be sure to read our best options trading strategies for beginners guide.

To make good money in the stock market most experts seem to agree that long-term investing is the best way to create wealth so make sure you properly understand the inherent risk before you grab some shares.

Thank you for reading!

Feel free to leave any comments below, we do read them all and will respond.

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How To Make Money In The Stock Market For Beginners
How to make money in the stock market for beginners

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15 Price Action Patterns Insiders are Using If a hedge fund managers were using 15 specific price action patterns would you want to know?

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  1. What do you think of the recent coronavirus pandemic and the world economy deteriorating ? Our society is increasingly becoming fragile and employers & employees are losing their jobs. Is it a wise move for everyone to working online environment ? If so, what is your opinion ? Can everyone work as a blogger and earn enough money to survive until the financial market starts to pick up ?

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