To trade profitable you need a method and a setup. In the beginning you have very little understanding of the market and how it works and what is a good setup and what is not a good setup. In stock market there are so many different setups used by people. Some of it is pure voodoo and some actually works. The easier solution for it is to model your trading on someone with big returns.
Dan zanger converted 11000 in to $18 million in 18 months
That is a return of 164000%. Before doing that he had blown up his account many times he claims.
If we study in detail what was the secret of his astounding returns then we may be able to generate good returns.
Following someone who makes 10% in a year will at best make you 5% in a year, better buy Index fund and retire from trading.
If you have to model your method you might as well do it on someone like Dan Zanger.
That was my thinking so I studied in microscopic detail every single thing about Zanger and his method during his explosive returns period.
Since then he has changed his method a lot as he trades larger account.
Dan Zanger talks a lot about chartpatterns
In fact the name of his website itself is www.chartpattern.com . So did he discover some amazing and secret chart pattern?
If it was so you just have to find that pattern and trading is very easy.
What really is the pattern that made him 18 millions.
There are obvious answers. But remember things are not always as they look.
Chart pattern is small part of the Dan Zanger mystic.
The surprise behind Dan Zanger returns
In fact if you study very carefully the history of his trading during his explosive returns phase , you would instantly recognise the role of earnings and earnings announcements in timing of his entry.
In the initial years, it would be all about low float stocks which has announced 100% plus kind of earnings. He would enter based on earnings plus chart patterns.
Those stocks make those blowout moves because of earnings and low float.
Now with bigger account he has started focusing on large caps with earnings.
Chart pattern is part of the story but the basic fundamental reason for those moves is very important.
The 400 stocks he monitors stock patterns on and trade are all with extremely high earning growth or momentum.
Dan Zanger is a momentum trader
The second thing you will realise is that he basically selects momentum stocks.
The stocks he trades have price and sector momentum.
He looks for chart pattern on those kind of stocks.
His most often highlighted patterns are bull flags and triangles.
Besides that he talks of 10 patterns on such stocks with explosive earnings and momentum.
Dan Zanger used to trade small stocks
When he made 164000 returns most of his trades were on small float stocks.
Stocks with less than 25 million float.
Many had less than 10 million float.
Most traders trade too big a float stocks. Unless you are a day trader , you should not trade big float stock.
Big float stock have very low probability of making big explosive moves.
If you have small account you have tremendous advantage in trading small float and small cap stocks.
Smaller stocks have greater variability in earnings growth due to their size.
So a small change in business climate can lead to sudden jump in earnings.
That results in big explosive move.
Dan Zanger used to bet the farm on big ideas
If he had a big idea he would load up like crazy.
He would often have his full account in one idea.
In the market there are plenty of small 20 to 30% kind of ideas, but once in a while you find a perfect idea with explosive potential, that is where you can really make big money.
But to bet big and that too on margin requires confidence in your skills and ideas.
Dan Zanger was a IBD follower
Dan Zanger in one of his interviews said he has read William O'Neil's book more than 100 times and he continues to read it every now and then.
If you study the people who have made big returns in the market, you will find again and again the same thing: most of them are growth investors.
Only growth stocks make big explosive moves during their hyper growth phase.
What color underwear does he wear
This is just topline highlights of his method.
If you study his method in detail you can fill up over 200 pages of notes.
If you are looking for developing a method to find such explosive stocks you need to do your own detailed analysis of his method .
Find out every single detail about his method.
If the secret behind his explosive returns is red Gucci underwear, then wear it and trade.
Are you serious about your trading?
If you are serious about your trading and want to build an enduring edge the Stockbee Member site might help you. Members tell me they have tried lot of things before coming to my site and it has offered them the most extensive and detailed methods to swing and position trade.
It is only for those who want to develop their own self sufficient trading method. It is not a stock picking service. It is service for you to build your own scans and trading method to have your own daily pick based on your method.
Be warned it will take you time to learn to trade. Learning to trade is difficult art and unless you are willing to spend months or years to perfect your strategy and also develop your mental edge you are unlikely to succeed in this game. Unless you understand that no site, no service, and no mentoring is going to work.
Why traders come to stockbee?
The member site is one of the most recommended site for learning to trade by other traders and bloggers. You will see no advertising, no hard marketing, no promotions, no free offers, no affiliate marketing, no incentive to other bloggers to promote the site, no constant twits self promoting the site, no free trial and no tall claims of making you instantly wealthy, and yet the site attracts new members everyday. Members come from all walks of life and all kinds of trading size and trading styles.
You will see that many trading bloggers have been using my market timing methods, scans , stock ranking lists and chart templates. They have developed their own methods based on my methods. Many paid newsletter site recommend my site to their subscriber for learning about trading and market.
Over the years thousands of traders have been members and those who benefited from the learning talk about the site to others or talk about the methods used and that is how new members learn about the site.
What will I learn in the members site?
The members site will give you in depth understanding to develop your own trading method. The emphasis is on making you self sufficient and confident of your own trading method and style.
As a member you will learn the basics of swing trading, momentum investing, growth investing and risk management.
You will learn about Stockbee Trend Intensity Breakouts method that uses momentum based swing trading to find 3 to 5 day swing trades for 8 to 40% profit.
You will learn about Stockbee Episodic Pivots Breakout method which uses Post Earnings Announcement Drift (PEAD) to find stocks that had a game changing earnings and that are likely to rally for 3 months to 12 months.
You will learn about Stockbee Dollar Breakout method that uses momentum, range expansion and swing trading approach to find 5 to 40 dollar moves in high priced stocks.
You will learn about Stockbee Lemonade Strategy for 401k which uses market timing and momentum to invest in 401k. You will get weekly update on how I am using the strategy on our 401k to do allocation decision.
You will learn about Stockbee Market Monitor method for market timing using breadth. It allows you to avoid risky periods in market and allows you to identify market turns. It is used for 401k allocation decisions.
You will learn about Stockbee Double Trouble method to find stock with confirmed upside momentum using anchored momentum and that are likely to continue their up move.
You will learn about Stockbee Night Time is Right Time method to find news catalyst based trade ideas for short term day trade and swing trade.
You will learn about Investor's Business Daily’s IBD 200 list and how it can be used to find swing trading candidates for explosive moves.
You will learn about Telechart 2000 and how to use it effectively to scan for swing and position trade ideas and to set up your 401k strategy.
You will learn about Jesse Livermore Range Breakout, Darvas Box setup, and many other member shared methods.
You will learn how to set up your own scans, select right kind of stocks, how to set up stops, when to enter , when to exit, how much to risk, how to track your trades and all other details about trading. You will learn about developing your own methods and not relying on others for trade ideas.
The site has hundreds of videos and trading methods and variation of methods. Members help each other in developing the methods and share actively their research and finding. A collaborative spirit allows you to get input from others on your trading ideas or problems.
The site gives you opportunity to interact with some of the most successful traders and learn from them about their trading methods. It is a vibrant community with members from different background and experience willing to help each other. The emphasis is on continuous learning and up gradation of market knowledge and setup knowledge. The members range from hedge fund employees, financial advisers, active swing traders, investors and new traders.
If you are looking to develop your own trading strategy the membership site might be for you. You have to be willing to put in the effort to build your own method. There are no silver bullets offered on members site. Every method, every scan, every nuance is detailed and all possible help is offered to design your own method.
Do you have a trial?
If you are just looking for trial you are better off trying thousands of other trading sites that offer free trial or one month trial and offer you promise of riches.
It is for those who are ready beyond the trial phase and ready to put serious months or years of efforts to learn to trade on their own. It is for those who want to learn to find their own fish.
The free blog has all the details about the methods I trade and if you go through the posts highlighted in the sidebar you will learn about them.
How can I become a member?
To sign up go to www.stockbee.biz and follow the sign up process. The site uses Paypal for payment processing.
6 comments:
I'm all in favor of this idea of following big ideas. I read a story about a guy that bet big on the bank stocks and made a ton. He also lost a ton on other bets. I'm going to research Dan Zanger's stuff to learn more. Of your approaches which one would you say most resembles his approach?
Hi Pradeep-
I just started reading your blog and really enjoy your trading philosophy and style. How were you able to study the trades Dan made during the time he traded $11,000 to millions of dollars? Is there a site that shows his exact trades during that period? Thanks.
Allan
Dan Zanger has a site www.chartpattern.com where you should be able to find his old trades.
Michael
Most of the stuff which I do is based on similar logic as his.Earnings breakout, Episodic Pivots, Top25 breakouts methods are based on similar logic.
No one finds stocks better than Dan Zanger, and his free chat room with over 420 daily users, to help spot set ups.
I have learn how to make money following his techniques. He shares all his insights.
Don't forget the emotional economics involved.
"Stockbee Episodic Pivots Breakout method uses Post Earnings Announcement Drift (PEAD) to find stocks that had game-changing earnings and that are likely to rally for 3 months to 12 months."
Hi Pradeep,
1/ Does PEAD require us to keep more liquidity in our portfolio as we approach each quarterly earnings announcement cycle?
I usually have to find some portfolio holding to cell if I'm adding a new stock post-earnings.
2/ Besides PEAD, which other strategies work on the 3-12 month time frame?
3/ What are your exit rules for a PEAD position?
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