Dan Zanger is a globally recognized legend in short-term trading, serving as the chief technical analyst at Chartpattern.com and the author of the Zanger Report newsletter. Over 25 years, he has honed his skills in chart patterns, excelling at identifying the launch patterns of major stocks. In the late 1990s, he turned an initial $10,775 into $18 million in just 18 months and achieved $42 million in 23 months, a feat that remains legendary in trading circles.

No Formal Education, Yet a Passion for Charts

Growing up in the San Fernando Valley of Los Angeles, Zanger dropped out of college and worked various jobs, including as a taxi driver and restaurant helper, before becoming a pool contractor in affluent areas. 

Despite his modest lifestyle, he developed a keen interest in the market in 1976, influenced by his mother's love for stocks. Fascinated by chart analysts on TV, he opened a brokerage account with $1,000 in 1978, quickly tripling his investment, which ignited his passion for stocks.

As an adult, Zanger carried a Quotrek to monitor stock prices while working as a pool contractor in Beverly Hills. A pivotal moment came in the 1990s when he attended a seminar by investment guru William J. O’Neil, transforming his ability to select strong stocks.

Initially, Zanger tried analyzing low-priced stocks but soon realized the potential lay elsewhere. Frustrated, he temporarily abandoned chart analysis but continued to study financial news, laying the groundwork for future success.

To gather sufficient capital, he sold his Porsche for about $11,000 and fully entered the market. Over the next year, he grew $10,775 into $18 million, leveraging his two decades of market knowledge and O’Neil’s teachings. This success allowed him to become a wealthy full-time trader and establish Chartpattern.com.

First Rise and Fall: From $440,000 to Bankruptcy

In 1991, Zanger started trading with $100,000. The Gulf War led to a market boom, and he quickly grew his account to $440,000, believing he had found a path to wealth. However, a market reversal halved his assets to $220,000. Over six years, his attempts to recover led to bankruptcy, leaving him $225 in debt to his broker. He sold his Porsche again, leaving him with only $10,775.

This experience profoundly changed him. He reflected, "I will never blindly trust any stock or let news cloud my judgment."

The True Comeback: Turning $10,000 into Millions

After bankruptcy, Zanger reevaluated his trading logic, focusing entirely on chart patterns, trend initiation points, and strong stock structures. He spent 25 to 30 hours a week studying charts, learning to identify stocks poised for significant gains. With the rise of tech and internet stocks in 1997, he spotted major opportunities.

Zanger’s market prowess grew, and he turned $10,775 into $18 million in 18 months. By December 2000, as reported by Fortune magazine, his profits reached $42 million over 23 months.

His success was built on decades of market knowledge and O’Neil’s teachings, leading him to become a wealthy full-time trader and establish Chartpattern.com. He was featured in Fortune, verified by tax and trade records, and named a top trader by Trader Monthly for two consecutive years. He frequently appeared in Barron's, Forbes, Active Trader, and other media, becoming a regular on radio and TV.

Dan Zanger's Ten Trading Rules

1. Ensure the stock has a solid base or pattern structure.
2. Buy when the stock breaks the trendline of the base or pattern, confirming with volume higher than recent levels. Avoid chasing more than 5% above the breakout point.
3. If the stock falls 3 to 5 dollars below the technical buy point, sell quickly. Higher-priced stocks may allow more leeway.
4. Sell 20-30% of your position when the stock rises 15-20% from the breakout point.
5. Hold the strongest stocks longer and quickly sell those that stop rising or lag.
6. Identify and follow strong sectors, picking stocks within them.
7. After a prolonged market rise, stocks may face sudden, sharp sell-offs. Learn to draw new high trendlines and recognize reversal patterns to aid in selling.
8. Remember, volume drives stock prices. Understand a stock's volume characteristics and watch for reactions during volume spikes.
9. Mentioning a stock's buy point in a newsletter doesn’t mean you should buy. Consider the day’s price action, volume, and market conditions first.
10. Never use leverage until you fully understand the market, charts, and emotion management. Leverage can wipe you out completely.