Here's some info that appears in Dec. 18th issue of Fortune Magazine on a former pool builder who turned his $11,000 trading account into over $18 million in 3 years. Fortune Magazine asked for proof of these returns which were provided in the form of brokerage statements of his actual trades and tax returns. They don't mention it in the article but he has a web site with his picks and education on how to trade the chart patterns he trades so you can become a self sufficient trader yourself. I'm going to sign up for his free trial myself to see what it's like. He only charges $45/month for a monthly subscription. For those who want to check it out his web site is http://www.chartpattern.com The URL to Fortune Magazine's web site with not only this interview with Dan Zanger, the former pool builder but some other interviews with other high return traders as well go to : http://www.fortune.com/fortune/2000/12/18/gen.html Here's Dan Zanger's interview that appears in Fortune Mag. Every few weeks last fall, a shifting array of Dan Zanger's friends would gather in the basement of his Los Angeles home. They weren't there for chitchat, however, or to watch the game. They were there to witness a performance--and to learn. For a few hours at a time, anywhere from three to five buddies would sit rapt in the darkened room, with windows shuttered to keep out the light, trying to glean the secrets of an artist at work. His blond hair as rumpled as his casual clothes, Zanger sat in front of five computer screens like a rock keyboardist surrounded by synthesizers. His body would tense as his eyes darted over the scrolling list of 800 stocks that he follows. Every so often, with the flick of a finger, he'd enter a buy or sell order. Zanger would concentrate so hard that he didn't notice when spectators came and went. He wouldn't hear the questions they called to him. "I'm like a surgeon going in to do an operation," says Zanger. "I'm totally focused." It's no wonder his friends and neighbors were curious. Just three years ago, Zanger, 47, was paying his bills by working in Beverly Hills as a swimming pool contractor, building Hefner-worthy tropical fantasy pools for rich and famous clients. In a good year he could make $50,000. Since then his investing, Zanger says, has turned $11,000 in savings into $18 million. That's a gain of 164,000%. "As far as I know," he exults, "it's the world record." Talk about any recent investing trend, and Zanger will tell you he was one step ahead of the market. "I foretold the biotech move two or three months ahead of time," he says. And those other investors who got whipsawed by the rapid turnaround in Internet stocks? Not Zanger. He says he was short-selling those stocks. Referring to a prediction he made in an investing newsletter that he began publishing last year, Zanger adds, "I showed everybody the market top of March 10." Yeah, yeah, yeah. We've all met a Dan Zanger--or 20. You know whom we're talking about: the guy at work who won't shut up about how he's whipping every fund manager on the planet with his tech portfolio. The golf buddy who can't stop droning on about the excruciatingly obscure--but incredibly lucrative--options scenarios he picked up from a $25 book. Or your neighbor's 21-year-old kid who, to hear his parents tell it, has made enough in the market to pay for their retirement. The only difference? Zanger appears to be telling the truth. His 1999 tax return and trading records, which he shared with FORTUNE, show capital gains of $14,232,878. Zanger is rare, but he's not alone. We undertook to locate members of a very unusual breed: individual investors who chalked up out-of-the-ballpark returns--and were willing to prove it with tax or trading records. Though no one was able to equal Zanger's universe-beating numbers, we did find a tiny, scattered tribe of investors with the kind of results that entitle them to all the cocktail-party bragging they want to indulge in. Our not-so-motley selection includes everyone from a stay-at-home dad to a personal trainer. Their investing styles couldn't be more different, though they usually combine an Olympian tolerance for risk with a penchant for unorthodox strategies that involve charts, options, margin, and the like--not to mention insane luck. They all have one thing in common: They are hands-down, no two ways about it, making mincemeat out of all those highly paid pros. By definition, most of us can't beat the market averages. But since investing became America's most popular participatory sport in the '90s, outperforming Wall Street wisemen has become a national obsession. It's the quintessential American myth--Anybody can make it big--reincarnated for the new millennium. And like any compelling myth, it requires a handful of unlikely individuals to keep us convinced that, yes, a muscle-bound personal trainer can outinvest a hedge-fund manager with billions of dollars in his portfolio. It's a tale Horatio Alger might have penned--if he had known a world with discount brokers and online investing. So what's Zanger's secret? The former pool contractor, who resembles a poor man's--er, a rich man's--Richard Branson, was always more than happy to explain his secrets to his friends once the market closed. He would become animated, describing to his awed flock why he bought, say, 1,000 shares of AskJeeves.com at the precise moment he did. The stock, he'd tell them, was clearly headed into a "pennant" formation--it had risen and then tapered off quickly--and thus seemed primed for another quick, steep increase. His friends would look on in glassy-eyed bewilderment as he explained his "technical" investing philosophy. It's not exactly a strategy that would make Warren Buffett proud. Zanger completely ignores yardsticks such as price-earnings ratios and revenue growth. The only thing he cares about is how a stock is behaving. "I trade whatever the market is going to push up the most," Zanger says. "It doesn't matter what the company does, or what their earnings are." Devotees of technical analysis believe that stock prices move in easily recognizable visual patterns that an experienced investor can capitalize on. So when CMGI is gearing up to a "cup and handle," or Amazon is perilously close to a "descending triangle," or--egad--"channel formation," Zanger moves. He internalizes those curves, those spikes, like a doctor scrutinizing a heart patient's monitor in an intensive-care unit. "Stocks are my buddies," Zanger says. "I know when they feel good or when they feel bad." At the beginning of November last year, Zanger noticed that Qualcomm's stock was acting "a little frisky." So he dove in, buying 5,000 shares on the way up from a split-adjusted $57.50 to $62.50. In a matter of weeks the stock was trading as high as $93 but was incredibly volatile. Zanger hung on, buying and selling parts of his position on dips and spikes. By Dec. 30 the price had leaped past $161. On the first day of the New Year the stock jumped a bit more, and Zanger unloaded his remaining positions at $196 and $194 for a profit of $2.7 million. How did he know to sell near the very peak? "It was clearly in a massive parabolic blowoff top," says Zanger. Obviously. This spring, Zanger says, he moved most of his assets into cash, shielding him from the tech meltdown. There the money will remain until his charts tell him the worst is over. While he waits for that to happen, Zanger is busy preparing to raze the home he recently bought in Kirkland, Wash. He plans to replace it with a dwelling modeled on Frank Lloyd Wright's Falling Water. "You should see the pool it's going to have," he swoons. As for the building of his mini-empire, Zanger is unequivocal: "It's the greatest story ever told."
The bottom line--technical analysis works. If you use it properly and maintain your position management, you'll be successful.
Curious if any one here has had a subscription to the chartpattern.com web site themselves and how they did personally in their own trading using his stock picks?
I tried to E-mail a question and the response was "we don't answer any questions unless you are a member". Can't say I liked THAT response! Anyone else able to get any information? TIA ....as always, GoodInvesting, Rocky
For a goof I signed up for their free trial registration and read the newsletter. Yesterday he recommended shorting QLGC @ 76, IDPH @ 188, RMBS @ 36 and SANM @ 75. All would have provided good profits had you taken them, although in reality you could have thrown a dart at any NASDAQ stock, shorted it yesterday and made good money. In today's newsletter, with the market murky as to its direction, he recommended no trades long or short. He simply uses chart reading and basic chart patterns and trend lines to make his calls, something anyone well versed in technical analysis can easily do themselves.
Yeah, I wonder why we're not all millionaires now, then. BTW, keep posting what stocks he says to buy/short in his newsletter.
looks like he trading off stair step patterns on these picks.. lower lows and lower highs.... Does he use stops...?
These are the stocks and buy points he recommended for today--I guess we'll see by the end of the day where they end up: CMVT at $106, CIEN at $85, ELNT at $34, GLW at $57, ISTI at $39, INRS at $51, ITWO at $52, IWOV at $32, MERQ at $95, MUSE at $59, NETE at $52, NEWP at $93, NUAN at $42, NUFO at $36, OPWV at $42
Hi all signed up for the trial as well. One can never learn enough. D. Zanger is for sure a great trader. Otherwise, how would he have made such a fortune in the markets. However, for a paid service, his website / subscription-service lacks some substantial ingredients IMHO. Research / Education : Those website links are well known. No added value at all ! Newsletter ( the thing you have to pay for ) Few charts with Bollinger-Bands and some trendlines. Buy Points mentioned for several stocks ( see zboys post ) : Nice - and what happens after you have entered the trade ? Wait and see ? What about stops ? Profit target ? Timeframe for the trade ( short / med / LT ) Expected S & R ? Nada ! In focus reports : Well, if you need them, go to http://www.marketguide.com or any other financial website and get a lot more info on any stock you want ; for free. chartpattern.com. is no match for TP or a bunch of other, very good websites out there ! If you want a more detailed trading strategy on certain stocks for free, every day, - go to http://www.sixer.com Example as of today : (MedTerm/MedRisk) Lexmark Intl Group Inc (LXK) is showing bullish trend as LXK posted Rally Day with increased volume. A bullish alert was given on Jan.03. (See TA Graph).MACD is above the centerline and trending up.MACD, earlysiXer, Volume, OBV, siXer-RSI, TSI, Momentum are Bullish.LXK closed above13-Day MA (42.76) and above 50-Day MA (42.80).LXK 21-Day Range is 37.56 to 47.50.Caution is advised as market volitility is very high. RSI is:58.15 and trending up. Volume %Change is:255.38%. Entry signal is below previous day high. LXK Closed on (01/03/01) at:46.81. Entry signal at 47.28. Protective stop at 45.15. Price Objective is 50.68. Long term Price Objective is 59.10. More info on this trade : http://www.sixer.com/y/s3/displayChart.cfm?Ticker=LXK Of course, sixer let's you screen on a couple hundred stocks based on your own ideas. Or use Bigeasyinvestor. http://www.bigeasyinvestor.com If you think a paid service might offer better services, have a look at http://www.3mtrading.com or http://www.marketscreen.com Marketscreen offers EOD and intraday screens on couple thousand stocks. You can look for certain indicator signals or a bunch of chartpatterns http://www.marketscreen.com/home/default.asp?chp=patterns Very good service is also offered by http://www.tradingmarkets.com