Dan Zanger, who has driven a taxi, worked as a laborer, served as a waiter, and been a contractor, began to get involved in trading in the 1970s but was always a "chopstick" until the 1990s, when he made a counterattack and became a "legend." He once set an astonishing record, making a profit of $42 million from $11,000 in just 23 months, and became a cover figure of Fortune magazine.

From a contractor to a trading master

According to media reports, Dan Zanger grew up in the San Fernando Valley area of Los Angeles. He dropped out of college and moved to the Rocky Mountains, and then made a living by driving a taxi, working as a laborer, and helping in the kitchen of a restaurant.

Although he didn't become a "legend" until the 1990s, as early as 1976, Dan Zanger became interested in the market and trading. He once said in an interview that his mother liked the stock market very much, and he often watched the business channel on TV with his mother, and was very fascinated by the affairs of Wall Street. In the program, chart analysts often discussed chart patterns and cycle analysis, which greatly influenced him and made him realize the importance of technical analysis to trading at an early age.

Advertisement

From getting rich overnight to bankruptcy

One day in 1978, he saw on TV that the price of a certain stock was $1, so he rushed to Kennedy Cabot in Beverly Hills to open a brokerage account of $1,000, and sold it a few weeks later at a price slightly higher than $3. This transaction made him completely obsessed with trading. After that, he bought a book about charts and spent a long time looking for the chart patterns discussed by analysts.

In 1991, Dan Zanger took out $100,000 to start trading. At that time, the Gulf War had just begun, and the market was rising sharply. Dan Zanger quickly turned $100,000 into $440,000, and he felt that he was on the road to wealth.

However, the market adjustment quickly shattered his dream, and his $440,000 turned into $220,000. In the next six years, he tried to restore the $220,000 to $440,000, but the result was bankruptcy. Before this, he couldn't even think of going bankrupt. This bankruptcy made him owe the broker $225, and he had no more cash to invest in the market, so he had to sell a car to raise funds.

Regain momentum and create brilliance againLater, he deposited the $11,000 from selling his car into a brokerage account. After paying off a debt of $225, he had $10,775 left for trading. After a big loss, Dan Zanger summarized some lessons, such as never letting gullibility blind his eyes, and not letting them hinder his trading anymore. From then on, Dan Zanger began to ride the ups and downs of the market. Later, he turned $11,000 into $18 million in just 18 months, which made him well-known. In December 2000, the figures he revealed in an interview with Fortune magazine showed that his profits continued to expand, reaching $42 million in 23 months.

Many people think Dan Zanger is a trading genius, but in fact, his success is entirely due to years of learning and accumulation, as well as developing a sense of the market, of course, there is also some luck. Dan Zanger spent 25 years focusing on studying charts. He once said, "I only rely on chart patterns, prices, and trading volume to make investment decisions. I check 400 charts every night, and I don't have time to study so many indicators."

Dan Zanger's investment philosophy:

1. Ensure that the stock has a good foundation support or chart pattern, such as similar patterns found in "Dan Zanger's 11 Basic Chart Patterns," before considering buying. Dan emphasized these patterned stocks in his newsletter.

2. Buy when the stock price crosses the trendline of the foundation support or pattern, and ensure that the trading volume is higher than the recent trend shortly after this "breakthrough." Never chase and buy after the price exceeds the trendline by more than 5%. You should also understand your stock's 30-day moving average volume, which you can find on most stock quote pages, such as eSignal's quote page.

3. If your stock retraces below the trendline or breakthrough point, you should sell quickly. The usual stop-loss point should be set about 1 dollar below the breakthrough point. The more expensive the stock, the more room you should give it to rebound, but the stop-loss amount should never exceed 2 dollars. Some people use a 5% stop-loss rule, which may mean selling a stock trying to break through, which has fallen below your purchase price within 20 minutes or 3 hours.

4. When the stock price rises by 15-20% from the breakthrough point, sell 20-30% of your position.

5. Hold the strongest stocks for the longest time and quickly sell stocks that stop rising or show weak trends. Remember, stocks are only good when they are rising.

6. Identify and track strong stock industry sectors, and try to stick to selecting individual stocks in these industries.

7. After a significant market rise, your stocks will be more susceptible to selling pressure, which may occur at an incredible speed. Learn to set new higher trendlines and learn reversal patterns to help you sell stocks. Some of you may benefit from reading "Japanese Candlestick Charting Techniques" or reading Thomas Bulkowski's "Encyclopedia of Stock Market Patterns," which can be found in my recommended reading.8. Remember, stock price increases require trading volume, so start by understanding the trading volume of your stocks, and then observe how the stock reacts when there is a surge in trading volume. You can see these peaks on any chart, as trading volume is the key to the success or failure of your stock's trend.

9. Newsletters mention many entry points for buying stocks; however, just because an entry point for a stock is mentioned, it does not mean that you should buy it directly when the entry point is triggered. You must first look at the stock's trend, combine it with the trading volume on the day the entry point is triggered, pay close attention to the overall market environment, and then consider whether to buy.

10. Never engage in margin trading unless you have mastered the market, charts, and your emotions, as margin can wipe you out.