26/03/2025, 09:26 Dan Zanger on Finding the Biggest Movers - by Kyna Kosling Dan Zanger on Finding the Biggest Movers A 2005 interview tells us that nothing much changes KYNA KOSLING SEP 05, 2023 96 6 7 Sh Dan Zanger (@DanZanger on X/Twitter) is the world record holder for the largest gain in a personal portfolio over both a 12-month and an 18-month time period. So when it comes to trading, the man clearly knows what he’s talking about. So, I recently watched, and rewatched, an interview with Zanger from 2005. I’m no sure why I haven’t come across it before, but at least I have now. I was really intrigued by how much value this interview had to offer, despite its ag and its relative brevity. I therefore wanted to take notes to get more out of it, whic hope you find useful. To receive future posts like this straight to your inbox, why not subscribe? It’s free! Type your email... Subscribe About my notes As always, I recommend you listen to the full interview, and not rely on my notes alone, which only reflect my personal take-aways and musings. You can find the interview on YouTube in three parts. My notes only account for p 1 and 2, which I found the most useful. https://tradingresourcehub.substack.com/p/dan-zanger-finding-the-biggest-movers 1/19 26/03/2025, 09:26 Dan Zanger on Finding the Biggest Movers - by Kyna Kosling Part 1: Dan Zanger Master's of Trading Part1 (2005 Video) Part 2: Dan Zanger Master's of Trading Part 2 (2005 Video) https://tradingresourcehub.substack.com/p/dan-zanger-finding-the-biggest-movers 2/19 26/03/2025, 09:26 Dan Zanger on Finding the Biggest Movers - by Kyna Kosling Follow the institutions From the interview, it’s very clear that the single-most important thing to Zanger i follow the leaders. Essentially, he wants to be in the stocks that the institutions want. And by ‘want’, I mean that the institutions aren’t afraid to literally pour hundreds of millions of do into a stock. That’s the sort of power that enables stocks to make huge, multi-month (if not mu year) moves. Adapting CAN SLIM A lot of what Zanger does is inspired by William O’Neil’s CAN SLIM formula, and ‘follow the institutions’ mindset is typical of that. Having said that, Zanger has adapted that formula to suit his personal style, particularly in terms of chart patterns, and how he enters and exits stocks. Of course, this is a common theme among skilled traders. Many of them point to O’Neil or another trading great as the source of their inspiration, but the reality is they cannot simply copy their mentor. They — and you too — must take the princi taught and adapt them to suit your own personality. My suggestion: look at your journal (If you just want to read my notes on the Zanger interview, skip to “How to find th leaders”.) Considering that trading is hard enough as it is, I strongly suggest you don’t make even harder by trying to become someone you’re not. Instead, take advantage of yo unique strengths and personality. There are many ways to make money in the market, but not all of those ways will w for you specifically. That’s why I’m a big fan of analysing your journal. https://tradingresourcehub.substack.com/p/dan-zanger-finding-the-biggest-movers 3/19 26/03/2025, 09:26 Dan Zanger on Finding the Biggest Movers - by Kyna Kosling Your own numbers tell you the truth about your trading. I certainly consider it an efficient way of identifying where you might have an edge, as well as helping you develop conviction. (In addition to plenty of screen time and studying lots of chart course.) I’ve already shared some personal breakthrough moments that came from analysin my journal, which you may find interesting or at least helpful to better appreciate reviewing your trades is so important. For example, realising that I was comfortably profitable in large caps at a time wh my overall P&L was red was a huge boost to my confidence, plus it helped me be m selective about what stocks I trade (a huge factor in Zanger’s trading too, as we’ll s later). Incidentally, at the time, I already knew the ‘best practice’ about being selective ab the stocks you trade, but simply hearing that advice didn’t nearly have the same im as seeing it in black and white from my own trading record. Another key moment was when I discovered that I’m very good at entries. Specific I’ve never had a winner move more than 2% against me. I’ve since then always set tight stop, without detriment to my strike rate, and with much more confidence th this is the right thing to do — for me. This had a huge impact on my bottom line: not only did I lose less on my losers in terms, but I was also able to trade with much bigger size, which helped me capture much bigger $ gains on my winners. Obviously, I can’t tell you what you will find when you look into your own journal. But I can’t recommend strongly enough that you do take the time to do really revie your trades. Quite aside from my personal experience, many high-profile traders h told their own stories on how reviewing their trades permanently altered their resu for the better, including David Ryan and Mark Minervini. https://tradingresourcehub.substack.com/p/dan-zanger-finding-the-biggest-movers 4/19 26/03/2025, 09:26 Dan Zanger on Finding the Biggest Movers - by Kyna Kosling How to find the leaders Back to Zanger’s interview. It’s all well and good to say you need to get into the leaders, but how do you find them? Explosive volume On a day-to-day basis, Zanger follows about 60 stocks on an eSignal quote window without charts. Specifically, he looks for surges in volume and wants to see how th price responds to those surges. The thinking behind this is that one of the biggest clues for institutions making th move lies in massive volume. And Zanger wants to make his move when the institutions make theirs (we’ll talk more about chart patterns later). As Zanger said at 4:52 in part 2: “I wanna go with the institutions when they go.” To help identify these volume surges, Zanger uses the 20-day moving average for volume, and looks for relative volume of at least 300% — though, as is often the ca for these things, higher is better. This is true for volume surges, but also for earnin growth. Fundamentals: powerful earnings and a big, global product Although Zanger relies more on technicals than on fundamentals in his trading (perhaps 70% vs 30%, but he has no fixed formula), he does consider fundamentals be another important piece to the puzzle. In particular, he wants to see the stock h powerful earnings, as well as the company having a big, global product. For earnings, Zanger wants them to be growing at a minimum of 50% — but again higher, the better. In the interview, he also specifically mentioned that he wouldn’t a stock that had earnings growth at just 25% or so, even if it had a good chart patte as he feels the stock has nowhere to go then. https://tradingresourcehub.substack.com/p/dan-zanger-finding-the-biggest-movers 5/19 26/03/2025, 09:26 Dan Zanger on Finding the Biggest Movers - by Kyna Kosling He also wants the company to dominate its space at a global scale. That might mea that the company is selling a well-known product directly, or it might be producin critical component for another company’s global product. Both points boil down to, as Qullamaggie often puts it, not buying ‘random stocks (mostly in context of looking at the theme, but Qullamaggie does also look at earnings). Zanger explained during this interview that technicals and fundamentals tend to g hand in hand. If a stock is making explosive moves, with good chart patterns, the underlying fundamentals are often good too. In fairness, in recent years, we’ve seen a lot of stocks make huge moves without ha any earnings, never mind good ones. Nevertheless, as Qullamaggie pointed out during his Chat With Traders interview (f 2021), you need to know what’s fuelling the stock. What’s driving the move. Combi that information with technicals can significantly deepen your conviction and enh your edge. High-priced stocks Zanger also mentioned that he never made money until he quit buying cheap stock and actually focused on buying the most expensive stocks in the market. In fact, he described expensive stocks as probably the biggest money makers in the market. To quote him from 14:20 of part 2: “When these things get up and run, you can just plough your money into them. [ You’re going to be buying fewer shares, but you’re looking at your per cent. “So, when Google [runs] from $200 to $300, that’s a 50% run. [And if] you’re on margin, you made 100% of your money. https://tradingresourcehub.substack.com/p/dan-zanger-finding-the-biggest-movers 6/19 26/03/2025, 09:26 Dan Zanger on Finding the Biggest Movers - by Kyna Kosling “Now, if the stock turns and starts to break down, you may lose 3% or 4% of you money. “So, your risk-reward ratio is enormous on the expensive stocks, and these are t real quality stocks that make huge runs, for long periods of time.” Another reason people often like to concentrate on high-priced stocks is that thes tend to be the more liquid names that institutions would actually consider buying. Relatively young companies Another important characteristic of big winners is that Zanger is looking for unde owned stocks. In practice, that often means looking for young companies and (relatively) recent IPOs. A good example of this, at the time of this interview (2005) was Google, which I’m covering in more detail below. The idea is that institutions don’t yet own these names. If they do, you won’t get th buying pressure needed to have these stocks make explosive moves. This is in sharp contrast to older, well-known stocks that have already played out t story. That have already saturated the market with their product. In this interview, Zanger gave Cisco as an example. There’s no point owning such stocks anymore, as the boat’s already fully loaded on one side. Or in Zanger’s word “You can’t give them away”. The bottom line is that Zanger is looking for relatively new companies that domin their space. The new global players that are changing the entire space they operate — like Google and TASER in those days — and are forcing their competitors to try and catch up with them. Not the global players that have already changed their spa and everyone knows it. The Google example Google ($GOOG) was a huge winner for Zanger (2:41 of part 1): “Google has been my big winner, and I’ve had an awful lot of my money in Goo — an extraordinary amount of my money in Google. https://tradingresourcehub.substack.com/p/dan-zanger-finding-the-biggest-movers 7/19 26/03/2025, 09:26 Dan Zanger on Finding the Biggest Movers - by Kyna Kosling “Basically, here’s a company that’s underknown, under-owned, but yet everybod uses Google for Search, revolutionising how they collect money for revenues — much so other competitors are trying to play catch up. “So that’s what you want: it’s someone who’s the dominant leader, earnings are explosive […] they’re up 100%, 120%, 140%, revenues are up 90%, 95%, 110%. Her stock that’s underknown, that’s under-owned — institutions have to come in an start buying it. And as they buy it, it fuels the stock prices, the stock runs up. A […] CNBC and other stations do a great job of promoting the stock, that it’s overvalued, [which] brings in the short players. They just hear that it’s overvalue so instead of them doing their homework, they’ll just pile in and be one of the s suckers that’s out there. That helps fuel the stock; as it races up, they do coverin “So, it’s an ideal climate, the stock […] has been a major winner for me. I’ve been [Google] on three big runs, and the money that I’ve made has just been gargantu to say the least. It’s really been huge.” Weekly $GOOG chart from IPO (in 2004) until early 2008 I feel the above quote explains the ‘fuel’ well: Explosive earnings and revenue. https://tradingresourcehub.substack.com/p/dan-zanger-finding-the-biggest-movers 8/19 26/03/2025, 09:26 Dan Zanger on Finding the Biggest Movers - by Kyna Kosling The dominant leader in its space, to the point it’s changing that field and forc competitors to try and catch up. A relatively recent IPO, so institutional ownership isn’t massive yet (i.e. the bo far from being fully loaded on one side). ‘Short suckers’ who try to sell momentum and end up being forced to cover at loss. Position sizing Another clear key to Zanger’s success, as evident from his Google example, is know when to size big. During the interview, he mentioned that he goes 2:1 margin when a leader breaks then starts peeling back his position while letting the stock run — in other words, sells into strength (presumably to pay for his risk), while trying to capture the bigg move on at least a portion of his position. I think this is a good moment for an important reminder: each approach to trading requires its own trade-offs (for example, selling into strength means you sacrifice chance of a home run, but going for home runs means low strike rates, and long an frequent losing streaks). However, you don’t have to take an all-or-nothing approach. Selling in parts can o prove a good balance between paying for the risk while trying to capture big gains But even more importantly than this, if you’re aiming for superperformance, you h to know when to be a pig. When you’re truly running a hot hand, and the deck is stacked in your favour, you have to be able to press your luck. I’ve previously discu this with a Druckenmiller lesson. Clearly, Zanger knows this too, which is why he isn’t afraid to use margin when a leader breaks out. But it also takes experience and a lot of studying to really know https://tradingresourcehub.substack.com/p/dan-zanger-finding-the-biggest-movers 9/19 26/03/2025, 09:26 Dan Zanger on Finding the Biggest Movers - by Kyna Kosling when you can size big. As Qullamaggie explained in his Chat With Traders interview you have to earn the right to use margin. When to enter a stock So, now that we’ve looked at how to find the leaders — or to put it differently, to s your stocks and compile your watchlist — let’s look at when to get into them. Trade as little as possible The first thing to emphasise is that you don’t want to be in the market all the time fact, Zanger said at 1:07 of part 2 that his biggest lesson from 2005 was to trade “fa less” than he was doing at that time. This was both in terms of trade frequency and number (universe) of stocks he was trading. Zanger has found that the market may make only 2 big moves over the course of a each lasting maybe 6–12 weeks, maybe a bit longer, after which they tend to exhau themselves. The rest of the time, the market’s simply consolidating the gains made Zanger wants to just be in (give or take) 4 powerhouse stocks that, after the market bottomed, have the potential to go on a huge run. Then, after the market exhausts itself, he can take his gains and go to cash while the market takes the necessary tim (4–5 months) to set up again. Market conditions The natural follow-up to the previous paragraph is to understand the market you’r and be able to recognise when to take on risk and when to go to cash. Zanger isn’t selective about what stocks he trades, but also about when he trades them. Typically, he’s looking for an oversold market before he’d consider getting into a leading stock. He wants the market to appear to be bottoming and/or ready to take So, what are some clues to this? https://tradingresourcehub.substack.com/p/dan-zanger-finding-the-biggest-movers 10/19 26/03/2025, 09:26 Dan Zanger on Finding the Biggest Movers - by Kyna Kosling A big one is seeing leadership stocks at or near new highs, appearing to be waiting a catalyst like a powerful new earnings report, while the overall market is cascadin down. Like Zanger said at 2:50 of part 2: “The market will lag these leading stocks. […] That’s why they’re known as ‘lead So, Zanger watches four or five leaders, and waits for them to break out of a good or pivot area, on powerful volume, before entering them. (More on chart patterns later.) Importantly, Zanger doesn’t wait for the indices to take out a pivot point (or give another concrete signal), because they are a lagging indicator. If you wait for the indices, you’ll miss the leaders. What you really want to do is get into the stocks th are gapping up on earnings while the overall market is collapsing. (I wrote about the same concept but in a different way in my notes on Qullamaggie Chat With Traders interview.) Zanger also said that he plays to seasonality, taking into account which are strong which are weak seasons, but didn’t really go into detail on this. Chart patterns As mentioned earlier, Zanger looks for certain chart patterns — basing areas — fo leading stock to break out, on huge volume, before entering. This type of entry tac offers a good risk-to-reward ratio (though Zanger feels that the good ratio also com from buying expensive stocks, as discussed earlier). However, during this interview, he didn’t elaborate on the exact patterns. Fortunat he does list the 11 most common chart patterns on his website: 1. Cup and handle 2. Flat base 3. Ascending triangle 4. Parabolic curve https://tradingresourcehub.substack.com/p/dan-zanger-finding-the-biggest-movers 11/19 26/03/2025, 09:26 Dan Zanger on Finding the Biggest Movers - by Kyna Kosling 5. Wedge formation 6. Channel formation 7. Symmetrical triangle 8. Descending triangle 9. Flags and pennants 10. Head and shoulders 11. Inverted head and shoulders If you want to learn more about any (or all!) of these, then take a look at Zanger’s website, which has dedicated pages for each of these patterns, including images. Going short Zanger is mainly a long trader, for that is where the really big money is to be made stocks can only go down 100%, but can go up several hundred, if not several thousa per cent — TASER went up about 5,000% in about 18 months, for example. (In addition, as Qullamaggie pointed out during a recent stream, shorting isn’t ver scalable.) That said, Dan Zanger has had some good short trades in his career. From 4:38 in p 1, he gives eBay ($EBAY) from January 2005 as a particularly notable example. eBay’s earnings were rapidly decelerating, and it had broken down from a high-lev channel (blue lines in the screenshot below), after which it created a bear flag (whi lines). The fact the blue channel (base) was quite a short one was another clue to th stock’s weakness. https://tradingresourcehub.substack.com/p/dan-zanger-finding-the-biggest-movers 12/19 26/03/2025, 09:26 Dan Zanger on Finding the Biggest Movers - by Kyna Kosling Weekly $EBAY chart from 2002–2006 Dan Zanger noticed that the stock was starting to sell off on earnings day, so he started shorting the stock on that day, ending up with a position of -160,000 shares Then earnings came out, which were poor — eBay missed earnings, plus projected weak earnings going forward — so the stock gapped down nearly 20%, and Dan Za ended up with his (at the time) biggest single-day gain from just one stock: $3.2 million. Passion for trading The interviewer remarked at 7:35 of part 2 that Zanger seemed to have a pretty exciting vocation. Zanger’s response was: “Well, I love it. Boy, I wouldn’t trade it in for world. Every day, it’s just absolute thrilling, […] and every day is new, it’s exciting, filled with lots of spills and chill But […] the rewards are absolutely phenomenal when you get it right.” I’m sure we can all relate to that one. The rewards are great when you get it right, b to get to that point, it does take a lot of hard work and dedication — this is someth https://tradingresourcehub.substack.com/p/dan-zanger-finding-the-biggest-movers 13/19 26/03/2025, 09:26 Dan Zanger on Finding the Biggest Movers - by Kyna Kosling we saw, for example, in Qullamaggie’s Stocksholm interview, but really, it’s pretty obvious in any trader who has ‘made it’. Do your homework Trading is a tough business. The only way to become consistently profitable is to e in this field — which is by no means a prerequisite for faring well in almost any ot profession. I think that the only way that you’re realistically going to be putting in the long, ha hours to reach that level is if you’re truly passionate about the activity itself. Here’s what Zanger said at 7:53 of part 2: “It takes years and years and years and years of learning and hard work, and 15days [with] a lot of ups, a lot of downs […] before you can get to put the whole package together. [Later in the interview (10:03), Zanger mentioned putting in 8–12 hours on weekends, as well as 3–4 hours after his regular job.] “But […] if you do the homework, you really study right, hard, long hours, you ju stay focused. [And] get rid of all the stupid indicators out there, all this MACD and volume accumulation, and money flow. I don’t use any of it, it’s totally worthless. It’s price action, it’s volume, it’s chart patterns, it’s spectacular earni And that’s all there is.” That final bit, once again, feels very close to what Qullamaggie is teaching us, man years after this Zanger interview was recorded. Price and volume are Qullamaggie’s answer when asked whether he has a routine identifying sector rotation. His entry tactics for episodic pivots (EPs) just focus on price and volume, with no need for “fancy indicators”, as he put it. And there are plenty more examples of where Qullamaggie — and many other fantastic traders — focus on simplicity. https://tradingresourcehub.substack.com/p/dan-zanger-finding-the-biggest-movers 14/19 26/03/2025, 09:26 Dan Zanger on Finding the Biggest Movers - by Kyna Kosling Zanger’s journey Things took off for Zanger when the dot-com bubble hit. Until then, it was a “brut learning curve, with lots of ups and downs. He was “making money, losing it, mak money, losing it again, and finally putting it all together”. Having the right environment come along — for which he had the right style of trading, the right mentality and the right trading tools — played a huge role in tha Just in case you weren’t convinced yet by how much market environment matters. Risk real money and gain experience Nevertheless, even if you really study a lot, you need to experience a few market cy before you can truly understand the different market environments, and how to recognise and trade them — which, once again, is precisely what Qullamaggie (and other big traders) say too. Furthermore, Zanger believes that you don’t really learn anything until you have a bucks on the line — in other words, you must trade with real money. That said, if you’re new to trading, Zanger recommends not putting too much mon to work until you’ve gone through a few cycles. The market isn’t here to give you money, but to take it, so you must “learn to play with the pros”, as Zanger put it. With all its pitfalls, “the market is designed to shake you out of your cash”. You can in too late, sell too late, allow your emotions to get the better of you… You name it You’ve got to get your routine down first. Only then can you get in front of the institutions, which is ultimately ‘what the game is all about’, in Zanger’s view. Zanger’s book recommendations Zanger’s favourite trading book (in fact, he calls it his '“stock bible”) is How to Mak Money in Stocks by O’Neil. https://tradingresourcehub.substack.com/p/dan-zanger-finding-the-biggest-movers 15/19 26/03/2025, 09:26 Dan Zanger on Finding the Biggest Movers - by Kyna Kosling Zanger says he’s read the book cover to cover 6 or 7 times in his first 6 months of trading, then read selected chapters 30 times (or so) over the next 6 years. He was “constantly hammering into [his] mind how to trade, what to trade, what [h mistakes are. [And] after a while, it was just […] like the light really came on, [and h started making incredible amounts of money.” Zanger also praises Reminiscences of a Stock Operator about Jesse Livermore (but written by Edwin Lefevre). It’s a “quick, easy read” that teaches you when to get in out of stocks, especially fast-moving stocks. For Zanger, these are the only two trading books to have ever really had an impact him. He considered other books just a lot of “fluff”. He says that if you only read th two books once or twice, and don’t re-read them, you better not lose your day job, because “you’re gonna need it”. Rather, just take these two key books and read them over and over, so that when yo are looking at things in real time, you can recognise the situation and know how to react. (Which is pretty much the same reason for needing to study lots and lots of charts.) Admittedly, this interview was recorded in 2005, so before books like Trade Like a S Market Wizard and Think & Trade Like a Champion by Mark Minervini came out. Sti many of these better books published since 2005 are heavily inspired (or at least th authors are) by the Livermore and O’Neil classics, which supports Zanger’s views. Either way, I think there is a very clear theme here that many greats (both in and outside of trading) teach: it’s better to constantly re-read a handful of excellent boo than to read hundreds of mediocre books only once. My concluding thoughts One thing that really struck me about the interview was how Zanger spoke (as opp to the things he actually said): very calmly and clearly, with a lot of confidence. https://tradingresourcehub.substack.com/p/dan-zanger-finding-the-biggest-movers 16/19 26/03/2025, 09:26 Dan Zanger on Finding the Biggest Movers - by Kyna Kosling He clearly knows his system, and also obviously knows how to boil it down to the principles. How to make it seem really simple — because to him, that’s precisely w it is, even if that belies all the years of hard work, studying and pain that went into Those very principles are also precisely what makes the interview relevant even to nearly two decades later. Everything that Zanger said is, at its core, still true today. Because very little chang in the markets. Sure, algorithms may create more noise, and some leaders don’t have growing earnings, just growing sales, but the principles remain — probably because the pe behind the patterns and the decision-making processes don’t really change either. So, what are some of the big lessons from this interview? 1. Find the most explosive movers in the market. Those are the leading stocks th can continue to make the biggest, sustained moves. (Note: this does not automatically mean that the stock is volatile — just that it can make huge and preferably, clean moves.) 2. Linked to point 1, follow the institutions. Huge volume is the biggest clue for 3. Understand the market environment you’re in. There are only very limited per in which the market is making big moves, and outside of those periods, it’s jus consolidating the gains. 4. With point 3 in mind, be selective about when you trade, as well as what you tr 5. Understand that to become successful in the markets, you need to be prepared put in a huge amount of work and gain years of experience before you can “play with the pros”. That takes real passion for trading itself — not just the money follows. 6. Learn from the greats — in particular, the core principles — but ultimately yo need to find your own style that fits your personality. Also bear in mind that the interview clearly doesn’t account for Zanger’s full syste for example, it doesn’t go into stop losses and other important risk management https://tradingresourcehub.substack.com/p/dan-zanger-finding-the-biggest-movers 17/19 26/03/2025, 09:26 Dan Zanger on Finding the Biggest Movers - by Kyna Kosling practices. Nevertheless, I believe the interview holds a lot of value, which is why I spent quit long time (I lost track of how many hours it was) rewatching it repeatedly and putt together the above notes. Please do give this post a like and share it with other traders if you found it helpfu also love it if you left a comment — complimentary or critical, I take all your feedb on board! I’m always looking to improve, both as a trader and writer :) Alternatively, if you’re not comfortable leaving a public comment, you can always message me on X/Twitter or email me at kayklingson@yahoo.com. More content like this To get future posts like this straight to your inbox, why not subscribe? It’s free! Type your email... Subscribe All my interview notes are available here. The Trading Resource Hub’s full archive is here. 96 Likes ∙ 7 Restacks Previous Next Discussion about this post Comments Restacks https://tradingresourcehub.substack.com/p/dan-zanger-finding-the-biggest-movers 18/19 26/03/2025, 09:26 Dan Zanger on Finding the Biggest Movers - by Kyna Kosling Write a comment... Charlie M 14 Dec 2023 Liked by Kyna Kosling Fantastic writeup LIKE (1) REPLY 1 reply by Kyna Kosling Mizz Sue FX 5 Sept 2023 Liked by Kyna Kosling I wish Dan Zanger write book. Just one. I'll bring everywhere I go. LIKE (1) REPLY 1 reply by Kyna Kosling 4 more comments... © 2025 Kyna Kosling ∙ Privacy ∙ Terms ∙ Collection notice Substack is the home for great culture https://tradingresourcehub.substack.com/p/dan-zanger-finding-the-biggest-movers 19/19
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