Today, we draft a little bit about stock trading record holder Dan Zanger. Dan turned $11,000 to $18 millions in 18 months, an unofficial world record on stock trading. Dan is kind of trader who likes to buy highly volatile stocks that are in the process of breaking out. He gets in quick and may stay in anywhere from a few hours to a number of days or in some cases, even weeks.

To understand more about Zanger, read “The Charts Know It All: Chart Pattern, Trading and Dan Zanger”, S&C reprinted article.

Using the premise 'cut losses short and let your profits ride' means that unless the trade goes against you at the beginning, it's hard to know exactly how long to hold the position. As long as it's moving up on volume, Zanger holds on.

The moral is that even on anticipated shorter-term trades of a day or so, it's important to have at least a rudimentary understanding of the fundamental strengths (and weaknesses) of a company because, if you are lucky, it will turn into a longer-term proposition.

Zanger combined his approach in chart pattern (on increasing volume) with CANSLIM stock selection. If the stock is acting frisky, there is generally a fundamental reason why; often institutions are accumulating the stock and the chart pattern is simply proof of this.