How do famous swing traders like Dan Zanger size up so fast?

[excrypto]

I have tried to follow how all these (Kristian Kullamaggie is another) massive traders took sub $10k accounts to $1mm+ all while keeping good R:R? I hear the whole trading community arguing to keep your risk <1% of your total account. If thats say a $5000 account then thats $50 risk per trade. No matter how I try to extrapolate an insanely profitable trade (lets say buy stock at $20 and sell at $180 risk $50 and buy 25 shares for $2 stop=$3989 profit) its still hardly any money (in relation to time and traders like Zanger doing it in 23 months). Now the above outlined fringe case is exactly that. Super hard for most people to land a stock like that once let alone multiple times. My question is, is it more likely that guys like him are far exceeding 1% and going closer to a kelly,half kelly,optimal f etc. to attain these gains? Anything im missing?

Please refrain from commenting that the gains possibly weren't audited, that CANSLIM/momo swing trading doesnt work,that your trading system is far better blah blah blah. Above is just an example of these kind of traders saying they do it in this short amt of time and how they do it.

Thanks and godspeed for some tendies fellow netizens

 

[schizo]

Anything im missing?

It basically boils down to a good money management. The common denominator among all these successful traders is that they double or triple down when they're on winning streaks and drastically cut their losers early on losing streaks.

 

[longandshort]

Er… who are these people?

In a large enough system there are people who have a long enough winning streak to be wealthy, but don’t confuse luck with skill. You can’t replicate luck. Depending on your style, and the volatility of your trade, size your position to avoid ruin.

 

[excrypto]

It basically boils down to a good money management. The common denominator among all these successful traders is that they double or triple down when they're on winning streaks and drastically cut their losers early on losing streaks.

On the streak themselves or on the stock. Bill O'Neil and CANSLIM style traders sometimes hold stocks for years. So its hard to know your in a winning streak in a year. If you get my meaning. I feel it has to do with pyramiding up on winning stocks as they if nothing else.

 

[excrypto]

Er… who are these people?

In a large enough system there are people who have a long enough winning streak to be wealthy, but don’t confuse luck with skill. You can’t replicate luck. Depending on your style, and the volatility of your trade, size your position to avoid ruin.

Lol someones clearly new to trading if you dont know these names. Thanks for adding meta related commentary. Always helpful.

 

[Axon]

Kristian Kullamaggie

Assuming his reputation at face value, I understand he specializes in an entry strategy with extremely tight stops and won't enter a trade otherwise, so even though the amount risked between the entry price and the stop is a small percentage of his account, because the stops are so close, the absolute values of his trades are of a much larger size than one would ordinarily expect, reportedly up to double digit percentages of his entire roll. He's also a swing trader and will sometimes hold a trade for weeks at a time after one of these entries. Just a few big runners per year like this will make big profits. I don't know firsthand if his performance is real but I have seen no indication it isn't.

 

[excrypto]

Assuming his reputation at face value, I understand he specializes in an entry strategy with extremely tight stops and won't enter a trade otherwise, so even though the amount risked between the entry price and the stop is a small percentage of his account, because the stops are so close, the absolute values of his trades are of a much larger size than one would ordinarily expect, reportedly up to double digit percentages of his entire roll. He's also a swing trader and will sometimes hold a trade for weeks at a time after one of these entries. Just a few big runners per year like this will make big profits. I don't know firsthand if his performance is real but I have seen no indication it isn't.

Yea Ive followed KK in depth for years. Hes actually who got me into swing from Daytrading.
I think hes for real. But his Intraday stops based on a 5 min ORB or 30 min ORB are insanity to me. Youre looking at a sub 20% hitrate for sure if not closer to sub 10%. I tried it all last year and got chopped up doing it.

 

[comagnum]

The winning formula for Qullamagie & Zanger are trading mainly or entirely from the long side of the strongest stocks in the strongest bull markets in history. Right place, right time, right idea.

A stock position of 25% that makes a 400% gain doubles the acct size. These guys got plenty of trades like that, some way bigger.

Qullamagie said he may risk -4% up to -8% on the trade, on his equity curve he is risking typically less than 0.50% It is the huge asymmetrical R/R on a small number of winners - like 5%-15% of all his trades is the lions share of gains.

 

[schizo]

On the streak themselves or on the stock. Bill O'Neil and CANSLIM style traders sometimes hold stocks for years. So its hard to know your in a winning streak in a year. If you get my meaning. I feel it has to do with pyramiding up on winning stocks as they if nothing else.

I meant the instrument you're trading and, more specifically, the trend. In a strong trend, you use higher leverage.

 

[tomorton]

Classic pyramiding involves opening further positions of equal size whenever the profit on the last trade opened equals the risk of the first trade. As each new trade is opened, the stop-losses of all preceding trades are advanced. The principle is that the net capital risked never exceeds the risk of the very first trade.