Tuesday, May 15th, 2007
Why Dan Zanger is richer than most traders
I have been studying up a bit on Dan Zanger, probably one of the most successful momentum traders of all time. Last year alone he made $22 million largely on big trades in Google and Apple.
His strategy involves buying stocks breaking out of chart patterns including flat bases, flags and pennants, on big volume. Zanger puts a lot of emphasis on volume.
What strikes me about Zanger is that he has become immensely wealthy using tools and chart patterns at everyone’s disposal and available in most technical analysis books.
Why? I think one of the reasons is that he puts his balls on the line all the time. He uses margin on all his trades, so if he’s got $50,000 he’ll borrow another $50,000 to increase his position to $100,000.
CLICK HERE TO READ AN EXCLUSIVE INTERVIEW WITH DAN ZANGER
Yes, this increases risk and volatility. But with trading and any other wealth creation endeavour it is easy to forget the number one mission: making money.
That’s the problem with a lot of vendors, promotors, and authors — even the good ones. They never really focus on the main mission. But then how popular would a book be if it says if you’re not in extreme discomfort for a considerable period of time you’re probably not doing enough or taking enough risk to get wealthy.
One of the few who’s addressed this is British publisher Felix Dennis in his book 
How to Get Rich. “Tunnel vision helps. Being a bit of a shit helps,” he said about what’s needed to get rich. “A thick skin helps. Stamina is crucial, as is a capacity to work so hard that your best friends mock you, your lovers despair and the rest of your acquaintances watch furtively from the sidelines, half in awe and half in contempt.”
I think a lot of us get lost in indicators, testing, risk management and often forget that you have to take risks to get big rewards. Sure, it is crucial not to get wiped out, but I’m beginning to think that being risk averse is as bad as taking too much risk.
As a business reporter I’ve interviewed dozens and dozens of self-made millionaires. They were all like Zanger and put their balls on the line and took big risks. Without exception, they all spoke of taking it to the edge and being in real discomfort to make it.
So we all have to make a choice: turn up the heat and have a shot at getting really rich. Or play it safer and settle for less. Both are valid choices.
CLICK HERE TO READ AN EXCLUSIVE INTERVIEW WITH DAN ZANGER
This entry was posted on Tuesday, May 15th, 2007 at 11:07 pm and is filed under Dan Zanger, Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
May 16th, 2007 at 7:37 am
[...] $ Why Dan Zanger is richer than most traders [...]
May 20th, 2009 at 1:28 pm
Brilliant article, especially the near the end.
I’ve followed Dan Zanger for years now and as a trader I think you nailed the critical factors as to why he is so damned successful with his trading.
Good work.
July 22nd, 2009 at 9:32 pm
I think that’s a very risky statment you are making.
Sure he got lucky in the Internet mania of 1998 -2000 and made outstanding returns. Be he aslo lost a massive % of his account in the years that followed.
You simply cannot risk more than 5% of your trading account without at least encountering huge drawdows. I knew aguy who made $5M by trafing in one stock at a time. He was 200%+ in on CROX hwen it gaped down 30%+ on poor earnings and he held on until the stock went down another 50%.
Yes big gains mean you have to take bigger risks….but you can’t gamble.
January 16th, 2010 at 4:10 pm
I continue to use Zanger 3 years later. For the cost of 1 trade I pay for his advice and his chart reading skills are gold. Last year returned over 120% following his stocks.
Forget the scanning. No need. I let him decide the stocks to trade.
November 26th, 2010 at 12:21 pm
Excellent. I wonder how he handled any discrimination from ‘banking types’, who viewed him as a simple builder and not a potential player in the markets.
May 13th, 2011 at 4:01 pm
I agree with the basic idea. But I’d like to point out that it’s not only that Zanger uses tools available to everybody, the important thing is that he DOESN’T use useless fancy tools available to everybody, and that everybody keeps using… Successful trading is a lot simpler than we think it is, that’s why it’s so difficult for our mind…
May 13th, 2011 at 4:14 pm
…I agree with the basic idea. But I’d like to point out that it’s not only that Zanger uses tools available to everybody, the important thing is that he DOESN’T use useless fancy tools available to everybody, and that everybody keeps using… Successful trading is a lot simpler than we think it is, that’s why it’s so difficult for our mind…
October 19th, 2011 at 11:49 pm
Check out http://www.selfishinvesting.com. These guys have audited track records and are completely transparent. We need more guys like them. I’ve made good money in my account (up over 40% so far in 2011) without going on margin.
Their timing model is nothing short of amazing. The returns are real since I’ve been a subscriber for almost a year, and all emails are time-stamped.
http://www.virtueofselfishinvesting.com/results
PositionSystems
January 30th, 2012 at 8:08 pm
[...] Why Dan Zanger is richer than most traders | Global Growth Investor …May 15, 2007 … I have been studying up a bit on Dan Zanger, probably one of the most successful momentum traders of all time. Last year alone he made $22 … [...]