Trading Regulations set by Dan Zanger:
Meet Dan Zanger, a modern-day trading titan who found his passion for stocks at a tender age. Growing up with a mother who loved the stock market, Dan would often watch business channels with her. One fateful day in 1978, he caught sight of a stock making a significant move on the ticker tape — a move that summoned his investing spirit. He made his first purchase, selling the stock a few weeks later for a pretty profit. And that was just the beginning.
As an adult, Dan, with a quotetrek always within reach, used to keep a close eye on stock prices even during his contractor jobs in glitzy Beverly Hills, building swimming pools in the '80s. His breakthrough came in the '90s when he attended a seminar by investment guru William J. O'Neil, marking a pivotal shift in his ability to pinpoint winning stocks.
With technology and internet stocks gaining traction in 1997, Dan ditched his Porsche for about $11,000 to fund his full-time market dive. Over the following year, he transformed the $10,775 into a staggering $18 million, all thanks to two decades of playing the market and revisiting O'Neil's works. Dan's success paved the way for him to ditch contracting and focus on managing his own capital, eventually launching chartpattern.com.
Fortune magazine gave Dan's trading feats a well-deserved spotlight after scrutinizing his tax returns and trading records, confirming his world-record-breaking portfolio appreciation of over 29,000%.
Here are Dan Zanger's cardinal trading guidelines:
- Ensure the stock sports a robust base or pattern.
- Buy as it breaches the trend line of that base or pattern, with volume surpassing recent trends shortly after the breakout. Keep purchases no more than 5% above the trend line. Familiarize yourself with your stock's 30-day moving average volume, available on most stock quote pages.
- Sell promptly if the stock slips under the technical buy area or breakout point by $3 to $5. More expensive stocks might need more leeway. Some traders use a 5%-7% stop loss rule.
- Shed 20-30% of your position as the stock climbs 15-20% from its breakout point.
- Hold onto your strongest stocks longest and jettison sluggish ones promptly. Remember, stocks are valuable only when they're moving upward.
- Zero in on strong stock groups and maintain selections within these clusters.
- After substantial market movement, your stocks may become vulnerable to a sudden, harsh selloff. Learn to establish new trend lines and recognize reversal patterns to aid in the exiting of stocks. Some may benefit from reading books on Candlesticks.
- Volume is a key determinant of a stock's movement, so learn to decipher your stock's volume behavior and how it responds to volume spikes.
- Newsletters may list stocks with buy points, but simply hitting the buy point doesn't mean an instant buy. Evaluate the stock's action, combine it with the day's volume, and examine the overall market scenario before considering purchases.
- Shun margin until you've mastered the market, charts, and your emotions. Margin can lead to devastating losses.
Head over to chartpattern.com to check out Dan's work or subscribe to his newsletter.
Additional Insights:
Dan Zanger is a celebrated self-employed stock trader and technical stock analyst, renowned for his exceptional trading performances and publishing The Zanger Report, a newsletter sharing market insights and technical analysis strategies[1]. His listed “10 golden trading rules” primarily focus on disciplined risk management, pattern recognition, and strict adherence to technical setups.
References:[1] Investopedia. (n.d.). Dan Zanger. Investopedia. https://www.investopedia.com/terms/d/dan-zanger.asp[2] YouTube. (n.d.). Dan Zanger - Technical Analysis - PureCalculatedRisk - 02/21/2012. YouTube. https://www.youtube.com/watch?v=-hHMAoHXtiE
Given Dan Zanger's expertise in the field of finance and investing, he emphasizes the importance of purchasing stocks with a robust base or pattern when investing in the stock-market. (Following text from '1. Ensure the stock sports a robust base or pattern')
Recognizing valuable stocks that follow technical setups is crucial for capital growth in the stock-market, as demonstrated by Dan Zanger's successful investing strategies and world-record-breaking portfolio appreciation. (Following text from 'Recognizing valuable stocks that follow technical setups is crucial for capital growth')
