markcrisp
187 posts
msg #52375
- Ignore markcrisp |
6/21/2007 10:03:15 AM
Hi,
I am sure you have all heard the story of Dan Zanger?
The former pool installer who turned an $11,000 into about $13 million. Apparently he was up to about $18 Million but then gave a "bit" back.
He swears by chart patterns.
My question is how did he get those kind of gains? He even admits him-self the bubble of 1998 -2000 helped ALOT.
He was also VERY agressive. Often going into one stock 100% on margin.
Kudos to him...but it's not a way i could trade. It's fantastic when it comes off....but if you hit 5 successive losing trades you would have been wiped out. Even a couple of losses would have resulted in 20%+ drawdowns.
I suppose we can "chip away" until the next bubble and then STEP on the accelarator and make a few million..:-) IF we have the guts to press them.
Any views on his style of trading/ newsletter?
Cheers
Mark
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corsino
259 posts
msg #52376
- Ignore corsino |
6/21/2007 10:41:38 AM
You read about the few that did that, but not about the hundreds, maybe thousands that went broke.
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markcrisp
187 posts
msg #52377
- Ignore markcrisp |
6/21/2007 10:57:47 AM
Yeah it's definitely the case you either made millions or lost the lot. In the long run you will lose it trading this way. Best if made some millions...take half off the table.
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alf44
2,025 posts
msg #52379
- Ignore alf44
modified |
6/21/2007 11:07:51 AM
"...gave a "bit" back..."
-----------------------------
He gave MUCH MORE than a "bit" back !
He actually reportedly made about $42 Million in about 23 months !
AND...his drawdown...at it's worst was about 75% of his funds...just to be accurate !
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maxreturn
745 posts
msg #52380
- Ignore maxreturn |
6/21/2007 11:24:44 AM
If this is true about Zanger the guy had balls of steel!
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alf44
2,025 posts
msg #52384
- Ignore alf44 |
6/21/2007 11:42:25 AM
max,
He says at one point...he lost about 32% of his account IN ONE DAY !
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nikoschopen
2,824 posts
msg #52385
- Ignore nikoschopen |
6/21/2007 12:00:30 PM
This is "Dan's 10 Golden Stock Rules And Trading Tips" from his website, www.chartpattern.com. Sounds like a rational guy to me. LOL
________________
1. Make sure the stock has a well formed base or pattern such as one described on this web site and can be found on the tab "Understanding Chart Patterns" on the home page, before considering purchase. Dan highlights stocks with these patterns in his newsletter.
2. Buy the stock as it moves over the trend line of that base or pattern and make sure that volume is above recent trend shortly after this "breakout" occurs. Never pay up by more than 5% above the trend line. You should also get to know your stock's thirty day moving average volume, which you can find on most stock quote pages such as eSignal's quote page.
3. Be very quick to sell your stock should it return back under the trend line or breakout point. Usually stops should be set about $1 below the breakout point. The more expensive the stock, the more leeway you can give it, but never have more than a $2 stop loss. Some people employ a 5% stop loss rule. This may mean selling a stock that just tried to breakout and fails in 20 minutes or 3 hours from the time it just broke out above your purchase price.
4. Sell 20 to 30% of your position as the stock moves up 15 to 20% from its breakout point.
5. Hold your strongest stocks the longest and sell stocks that stop moving up or are acting sluggish quickly. Remember stocks are only good when they are moving up.
6. Identify and follow strong groups of stocks and try to keep your selections in the these groups
7. After the market has moved for a substantial period of time, your stocks will become vulnerable to a sell off, which can happen so fast and hard you won't believe it. Learn to set new higher trend lines and learn reversal patterns to help your exit of stocks. Some of you may benefit from reading a book on Candlesticks or reading Encyclopedia of Chart Patterns, by Bulkowski.
8. Remember it takes volume to move stocks, so start getting to know your stock's volume behavior and the how it reacts to spikes in volume. You can see these spikes on any chart. Volume is the key to your stock's movement and success or failure.
9. Many stocks are mentioned in the newsletter with buy points. However just because it's mentioned with a buy point does not mean it's an outright buy when a buy point is touched. One must first see the action in the stock and combine it with its volume for the day at the time that buy point is hit and take keen notice of the overall market environment before considering purchases.
10. Never go on margin until you have mastered the market, charts and your emotions. Margin can wipe you out.
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heypa
283 posts
msg #52386
- Ignore heypa |
6/21/2007 12:29:08 PM
Looks like he learned some hard lessons and has reformed.
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