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.
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.
Word Count: 416. 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.