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

[newwurldmn]

I think it was more than a few years as he's been trading for over a decade. He did say he blew his initial small accounts starting out.



I don't think the Bitcoin analogy is applicable as that's essentially just a single lottery ticket. Quallamaggie was trading frequently, so I don't think it's possible to be that lucky for that long.

We can agree that his method was perfectly suited for the current market conditions which he must have exploited fully. So, in that sense he did of course have a great bit of luck.

Anyway, don't think I'll be spending any more time defending him as I don't have any vested interested in the guy.

As for insane risk, I think I mentioned a few times already a very wealthy trader in Norway (former institutional trader) who blew his entire fortune ($100M) in one single trade. Now, that would be insane risk.

Insane is a qualitative term, but he’s running substantially more beta than the market.

 

[M.W.]

"managing risk" generally refers in the financial industry to managing trading positions. Trading in short.

Making it as in being long term profitable and showcasing a risk profile that, risk adjusted, reflects a prudent level of assumed risk rather than blowing up accounts and only showcasing the periods of success.

I find in the land of directional bets,risk management is the easiest part..Are you talking derivatives??


Let's forget about the Kullamagi as I agree he's a momo unicorn in the perfect unicorn enviorment.

Before I disagree with "making it" and being wired, we should define making it...

 

[M.W.]

A long term successful trader does not rely on "luck" (though a healthy dose never hurts) and showcases a positive risk adjusted track record in up, down and sideways markets. Most else is lucky timing.

Jas that guys' account been audited and verified by a trusted and established third party?

I think it was more than a few years as he's been trading for over a decade. He did say he blew his initial small accounts starting out.



I don't think the Bitcoin analogy is applicable as that's essentially just a single lottery ticket. Quallamaggie was trading frequently, so I don't think it's possible to be that lucky for that long.

We can agree that his method was perfectly suited for the current market conditions which he must have exploited fully. So, in that sense he did of course have a great bit of luck.

Anyway, don't think I'll be spending any more time defending him as I don't have any vested interested in the guy.

As for insane risk, I think I mentioned a few times already a very wealthy trader in Norway (former institutional trader) who blew his entire fortune ($100M) in one single trade. Now, that would be insane risk.

 

[Darc]

Yes, his results were audited... apparently.

Zanger started his record run by picking one Stock at a time with a 2 to 1 margin. He would gradually increase that to 12 stocks at his peak of $42 million. But he didn't increase the number of Stocks quickly

He started as a Canslim proponent but ended purely technical.

 

[Darc]

If you listen to how Mark Minervini won the 2021 USIC, it sounds similar to how Zanger produced his record $42 million. Although I suggest that Minervini held more Stocks, but the quick turnaround on Margin sounds similar.

 

[tsfx]

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

Finally, someone seems to get it by doing the math. Yes, these gains in that time period do not fit the picture in any way, so someone is lying.

Kullamaggie doing strategies on daily charts, strick money management and now claiming he went from 5M to 80M in like 2 years or what not? You literally need to be all in in every trade AND WIN every trade to make that happen. Yet he claims that the win rate is like 30%+ or smth. And given the statistics of markets moving relative to ranging and given that the strategies are mostly triggered on daily timeframe....come on dude. Bunch of fcking BS.

 

[tsfx]

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.

what money management. There is no money management when you're doing 10x in a year, dude. It's all in, all the time.

Doubling or tripling down. How do you KNOW you WILL BE on a winning streak when you just doubled your size? Cutting losses early? Sure, but the likelyhood of stop loss triggering increases drastically as well. You can't escape stats. Markets are not moving that much all the time otherwise everybody would be a millionare. How difficult is it to trade when the market just shoots in one direction AND provides liqudity at the same time?

 

[Darc]

They're all similar; Ryan, Minervini, Zanger, Quallamaggie, Kell etc. It's just how much FA they use. Zanger and Quallamaggie are probably the most TA, with Ryan preferring more FA and longer holding periods.

 

[Darc]

What's suspicious is that he hasn't repeated it. It's 20 years later, surely he'd be a better Trader now?

 

[tomorton]

When you add monies to any position, you are increasing the amount at risk in that position are you not? So, if you buy 100 shares of XYZ at $10 per share, you had $1,000 at risk, now you pyramid and add say another 100 shares but, now the share price is at $15. Your 2nd investment is now $1,500. Total at risk now is $2,500? Now, you have momentum working for you and the stock can go continue to go higher or it can take out your stop loss. Depending on what price you got sold, you would have either a gain or loss. Nothing is guaranteed in trading. Was just pointing out the increased risk. Like it or not, that is reality.

This is not how classic pyramiding works. The idea is to always advance your stop-loss(es) when an additional trade is opened.

For example -

Open Trade 1:
Buy at 10,000
Stop-loss at 9,900
Risk = -100

Price rises to 10,100

Open Trade 2 at 10,100
Stop-loss at 10,000
Move stop-loss of Trade 1 to 10,000
Aggregate risk = -100

Price rises to 10,200

Open Trade 3 at 10,200
Stop-loss at 10,100
Move stop-losses of Trade 1 and Trade 2 to 10,100
Aggregate risk = +/-0

Price rises to 10,300

Open Trade 4 at 10,300
Stop-loss at 10,200
Move stop-losses of Trade 1, Trade 2 and Trade 3 to to 10,200
Aggregate risk = +200

And so on and so on.