Interview: Seeing The Patterns With Dan Zanger by Matt Blackman
On Trading, Markets, And Doing What Works
Dan Zanger of Chartpattern.com is a swing trader and technical analyst focused on stocks — and a force in stock trading. He is the world record holder, independently audited, for the largest percent change in a personal portfolio for a 12-month period (and unofficially for an 18-month period). His one-year record between 1998 and 2000 during the tech bubble was a gain of 29,233%. All in all, over time, he was able to turn $11,000 into more than $40 million.
How does he achieve these types of returns? He has spent 20 years studying every type of chart pattern formation imaginable and finding what works. His thrice-weekly newsletter regularly highlights some of these patterns in his stock analyses.
STOCKS & COMMODITES contributor Matt Blackman first interviewed Dan Zanger for this magazine in our August 2003 issue. Catching up with him once more, he spoke with Zanger via telephone on January 12, 2014 to find out how he has fared in the markets in the decade since.
It’s hard to believe it has been more than 10 years since our last STOCKS & COMMODITES interview. Do you still mainly use chart patterns and volume to trade?
A lot has changed since that interview 10 years ago, but I still use the same techniques — chart patterns, price, and volume — to trade, which continue to be very effective. For momentum and swing trades, those techniques are the lifeblood in this type of trading environment, especially for the active Jesse Livermore–type trader. For the longer-term investor or mutual fund, it’s completely different. But for those who don’t have the wherewithal to hire a huge staff, count how many trucks are leaving the factory, and pore over sales reports and hundreds of pages of financial records, there really is no other way. The average Joe just can’t hope to do what institutions do. Chart patterns and volume are the best tools available to the retail and independent professional trader.