CANSLIM is a stock-selection method developed by William J O’Neil, who founded Investor’s Business Daily. The acronym consists of:

C – Current Quarter Earnings

A – Annual Earnings Growth

N – New Products/Services/Management

S – Supply and Demand

L – Leader/Laggard

I – Institutional Sponsorship

M – Market Direction

By looking at the above components, a trader can determine a particular stock’s future potential.

A Breakdown of the CANSLIM Strategy

The CAN SLIM strategy is focused on enhancing your profits and accelerating your stock market investing success through the following seven components:

1.C – Current Quarterly Earnings

Current quarterly earnings per share must be showing moderate or high growth rates; growth in current quarterly earnings must be at least 25%+ versus prior-year quarterly earnings, indicating good current business momentum.

2.A – Annual Earnings

A company should have a history of consistently growing earnings over the past three to five years that is strong and provides the potential for continued long-term growth.

3. N – New Product/New Management/New High Prices

New products, new management, and/or a stock reaching new high prices represent a major source of potential momentum for a stock. New products are sources of new revenue; the new management is an opportunity for potential new growth; and new high price levels are signs of significant interest by the investment community.

4.S – Supply/Demand

Stocks that have limited supply of shares available (low float) and high demand (high trading volume) will typically appreciate faster than those with an abundance of supply and low demand.

5.L – Leader/Laggard

Investors should always buy market leaders (not laggard stocks) because leaders will produce significantly better performance than laggards; market leaders always have the highest relative strength (RS) compared to their peers.

6.I – Institutional Sponsorship

Investors should only be interested in companies that have been purchased by the leading institutional investors and hedge funds. The demand for companies purchased by institutional investors is a significant factor in the growth of the stocks of those companies and often leads to long-term gains.

7.M – Market Direction

Even the best-performing stocks cannot maintain their performance in a weak overall market. Determining if the overall market is moving upward or downward will assist in deciding your trading strategy for that stock.

How CANSLIM Works in Real Life

CANSLIM helps traders do the following:

• Identify companies that have strong fundamentals
• Avoid low-quality/spread-out stocks
• Notice breakout patterns
• Enter trades at the correct time(s) when there is momentum.
• Manage risk by following the overall trend of the market.

It is one of the best growth investing strategies used by professional traders worldwide.

Why should you learn CANSLIM from NXT Institutes?

At NXT Institutes, our expert trainers break down complicated systems and explain them using actual real-world examples. We have gained recognition for being:

• The best trading institute in Malappuram
• The best forex trading institute in Malappuram

What we teach in our course:

• All aspects of the CANSLIM methodology
• The tools needed for stock screening
• Real-time analysis of events in the market
• How to read charts and conduct technical analysis
• Methods for managing risk
• Psychology of trading.

You will be able to use CANSLIM to grow your trading career or to become a successful investor. We will help you understand this process step-by-step.