A Special Time for Reminiscence of My Trading Journey

 每逢佳节倍思亲 or The Festival Occasion is Often Time We Miss Our Relatives Far Away.

(It was a guest post on Brian Lund’s blog site found here http://stks.co/k2XQ , and I just modified it for today’s special occasion as it is the Moon Festival.)

It is very emotional time in my life! – Today is a Chinese Traditional Holiday: the Moon Festival or Mid-Autumn Festival when family and friends in China would gather to celebrate this holiday with dances, feasting, moon gazing, and moon cakes. I was lucky to have celebrated such a special day with friends at a brunch and at a crowded Chinese party in the evening.

Despite the good time spent with friends, a few weeks of straight gain in trading, and the perfect weather for the Full-Moon appreciation tonight, I felt somehow nostalgic! I am so far away from my hometown and family members, especially when thinking about my life and trading journey in the U. S.. The Moon Festival day was not only the exact same date back in mid 1990’s when I left my hometown and family in China for the United States to study and live, but also the same time in 1998 during the internet bubble when I happened to get into stock trading.

From a young girl who could barely sit still indoor and only enjoyed outdoor activities to becoming a full-time stock trader who can stare at streaming quotes and charts on the computer screen for over 10 hours by the deck; from a young Chinese woman who used to dream of becoming a traditional housewife of a wonderful husband with beautiful children to becoming a career-minded lady who is independent and assertive with a free spirit… I have gone through a lot in my life in these years, but I never regret anything happened in my life for I believe that things happen for a reason, and stock trading happened to be one of many good things in my life!

How I Got Interested

In July of 1998, I just finished college in South Florida with a Business major. I kept thinking about what I would like to do next; meanwhile, I was working as a waitress in a Sushi restaurant to support myself.

The old Chinese traditions taught me to work hard and save for rainy days and I had managed to put an initial investment of $15,000 into a mutual fund.  One day, I received my statement and was surprised to see a 12% return for the year or $1,800 gain. With great joy I told my best friend about it. He answered unemotionally: “Do you know you could have made 5-10 times of that if you invested in stocks instead?”

What?  Really? I suddenly became curious about this new discovery. The next day, my friend started showing me reams of paperwork from his seventeen different subscriptions, pointing out that Investor’s Business Daily was his favorite among all of them.

He also showed me a financial TV channel called CNBC that he was watching daily.

As I looked at the comparison of the historical returns of $CSCO, $INTL, $MSFT, $KO and $DELL with the best performing mutual funds, I was stunned by the huge difference in their performances.

New-born Calves are not afraid of Tigers aka My Trading Started Nicely

I started following CNBC and I learned about stock symbols and what their businesses were about. This was during the internet bubble when all stocks related to the networking, Semi’s, Chips, computers, fiber optics, online brokers and the Internet were HOT!!!

I eagerly opened an online brokerage account with an initial deposit of $2,000.  One day, I saw that a stock called “The Sharper Image” had moved up in one day from $8 to 20 on the news that it would open online stores. I wrote down its ticker and kept this price move in mind. A few days later it went back down to $9.00 so I immediately bought 200 shares. A couple of days after that it shot up to $21 on the same news. I sold it and doubled my initial $2,000 investment.

Unbelievable!!! I had just made a 100% profit in a few days; it was much better and much easier than having my money in a slow-growing mutual fund. The next day, I got out of my mutual fund and sent all the money into my E*TRADE account, which then totaled about $20,000.

(Ironically, The Sharper Image filled bankruptcy and closed down in 2008.)

I began to buy every trading book out there and read them over and over. I followed IBD diligently, learning about stocks’ fundamentals, and I traded most of high flyers of that time, mainly based on my gut feeling and instinct.  This included $AOL, $QCOM, $AMZN, $YHOO, and many others.

Then something strange happened.  The price behavior of most stocks began to change.

I remember holding 100 shares of $NSOL with a 70 point gain at one time. Two days later, I came back to my desk after having lunch, and saw that $NSOL started tanking like a falling knife on some negative news.

My heart stopped beating, and my hands were shaking and sweating. I was freezing, and I couldn’t move my fingers as I watched it rapidly slicing down below my buy point. Luckily it opened up 20 points the next day, so I sold immediately for a $2k gain. But something wasn’t right.

Another morning, as soon as CNBC announced $MSTR had accounting issues, the stock dropped 100 points in ten minutes and I had to dump my 200 shares for a huge loss. Those wild days taught me to be able to endure big time volatility and also made me mentally tough.

Similar incidents with extremely volatile price moves started happening a lot by late 1999. This was the time when everyone was talking about stocks and acting like experts, which caused me to become alert and cautious about being long stocks. I started shorting some high flyers.

I shorted $YHOO at its exact all-time time high of $500 or $125 post split adjusted price ( it dropped as low as $4 later ); I shorted $CMGI at exactly it’s all time high of $300 ( it hit below $1 a year later ). Although my entries were good, I only caught partial gains on those shorts.

From mid 1998 to the end of 2000 despite a roller coaster ride, my initial trading funds went up over 800% for a $150k gain. Being a young female immigrant who used to make only $25k a year working part-time while studying for school, I was very happy with the profit.

Finding a Mentor and Learning Technical Analysis

Like life, my trading journey was not all smooth sailing. A bear market started from September of 2000 to March of 2003 when I found that trading old leaders was not working well. I made money, and then gave it back, and repeated the process. It became evident that I needed to improve my trading skills and to find a mentor if I wanted to be successful in trading.

I paid $1,800 for course materials about day trading from a website, but it didn’t work for me at all. I had to work other jobs outside of trading to make some income, but I didn’t give up my passion for trading.

Then one day in 2004, I was browsing through a trading magazine at the book store, and I read an amazing successful story about a former pool contractor who became a multi-millionaire by turning $11k into $42 million in 18 months. His name was Dan Zanger. Learning about his astonishingly successful story made me so inspired and excited as if I found the miracle, and I knew he would be my mentor I was looking for!

I started subscribing to his newsletter and tried to learn about his stock picks, technical analysis, chart patterns, and his trading style. I studied hard and asked him all silly questions I could in his chat room. I attended his seminar a few times in a row, and garnered as much knowledge as I could. I found his trading style amazing.

At the good time Dan would hold his winning positions as long as he could, but during choppy markets he would reduce long positions and change his stance accordingly. Dan taught me something important about trading: be flexible, be objective, never believe in you stocks, never argue with the market, and never give up.

Achievement and More Challenges Ahead

I started trading full-time again in 2006. By going through that learning curve of losing and winning repeatedly, my trades finally became more consistent and more profitable. I combined Dan’s trading method with my own style, one which fits my personality. By 2008, the hard work paid off.  I turned my $50,000 trading fund into well over one million dollars in profit by trading leaders such as $AAPL, $AMZN, $BIDU, $CF, $POT, $MOS, $WYNN, $LVS, etc. Some of my best trades were even shorts which I took in the fertilizers into 2008′s deep decline.

(Those trades mentioned above were only stocks without options involved.)

About three years ago, I became interested in option trading which seemed to be a trend in equity trading. I witnessed how some traders in Dan’s chat room made killing on GOOG, BIDU and AAPL per Dan’s technical calls when playing their options correctly. Moreover, one trader I met in one of the Dan’s seminars showed me his option trading report in AAPL in which he profited over $6 million dollars. I was so thrilled with such powerful profit in percentage term created by options with much less trading capital involved.

I started exploring this new method of trading. To me, it’s important to utilize options along with stock trading according to the technical setups, their liquidity, and market condition. So far I have been enjoying big risk and rewards in option trading, and I like to keep adapting and evolving.

 (Note: Dan Zanger doesn’t suggest new traders to try option trading for it has over leverage risk unless one has acquired enough trading experience and technical analysis skill with risk tolerance.)

Over the years my trading journey has had many ups and downs, but I am a trader who likes to pick myself up after a fall, who aims high after winning, who loves to keep learning, and who always strives to become better. I know that trading has already become my career and my passion in life, and there are two quotes which I always remember to keep me focused and grounded:

“Patience, persistence and perspiration make an unbeatable combination for success”. – Napoleon Hill

“The more I learn, the more I learn how little I know.” – Socrates

 

 

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About Angela Zhou @z8angela on Twitter

I am a full-time swing/day trader trading stocks & options. I got into stock trading/investing since the internet bubble in 1998. I am optimistic in life and objective in trading. The purpose of this blog site is for me to share my trading experience and market view with others. I may write something about life experience and living, too. My motto is: A Great Mind Becomes a Great Fortune. I love people and life, and I appreciate beauty in everything. Thank you for viewing!
This entry was posted in Trading and Life, Uncategorized. Bookmark the permalink.

21 Responses to A Special Time for Reminiscence of My Trading Journey

  1. Ryan says:

    Great write up and nice blog. I’ll continue to follow it so keep writting!!!

  2. Brent says:

    Kudos. Very inspirational. Would love to watch your entires and exits on stocktwits. Would be very helpful.

    -Quadten

  3. Howard says:

    Thank you Angela for sharing your very inspirational story including all the ups and downs.Would be very happy to follow your journeys through your blog & twitter.Happy holiday to you.

  4. markcs1969@aol.com says:

    Angela: Do you limit your trading to just a few of the top leading stocks when you made those impressive gains? You mentioned, AAPL,GOOG,CF, AMZN, BIDU to name a few. I find myself trading too many stocks (only the best fundamental and pattern setups), but I lose my focus looking at so many. I want to get those kind of gains you get! Mark Suggs

  5. Admin says:

    Great read. Congrats to you.

  6. Calamari says:

    Tried Dan Zanger’s site. Did more harm than good for me. He cut back days to like 2 a week, and he gives a lot of vague responses, like ‘Don’t know. Not sure.’ He’s not worth the $79 per month. Your money is better spent elsewhere. She’s probably paid to say this.

    • Understood. But I’ve been paying for his service since 2004, and also his fee has been raised. God, I wrote about my story, nothing to with him, not sure he knows about it. I’m not even allowed to talk about my blog in his chat room. BTW, there is a Chinese proverb: “Teachers open the door, but you must walk through it yourself.” Best luck to you!

    • I tried Dan Zanger’s report for 5 months and I too have the same experience as you. Then I tried Investors.com and never came back. Now, I am subscribing to Investors.com and MarketSmith, and that’s it! My mentor is William J. O’Neil. Thanks to Bill O’Neil I make decent money. I pick my stocks right from the MarketSmith database.

      • We have Chinese sayings: Teachers open the door, but you must walk in yourself. Give a man a fish & you feed him for a day; teach him to fish & you feed him for life.

        Nowadays I make most of my calls based on my observation, chart patterns, and instinct despite my continuing subscription from Dan. But it’s always good to learn from others’ excellence, omitting their imperfection.

        Thanks!

        Angela

  7. Your a marvalous and interesting girl good story about the party and culture as well. was a lovely story and inspiring and very instructive as to things i need to do to get started. Thanks

  8. fred131 says:

    I like your American dream comes true story. 50K to 1MM is 40 times and you have done it in 2008.
    My guess is you have more than 5MM today, well done ! I am your follower here eventhough you are much younger than me

  9. Rob says:

    Excellent read and very inspiring! Thanks for sharing your story with us. Can you share how you started learning about options? Very interested in adding that to my style of trading. Thank you!

  10. soullfire says:

    Your trading journey is quite impressive and inspiring Angela. To tell the truth, even your initial start with your mutual fund earnings is pretty impressive in its own right. For you to have the discipline to save up such an amount and know enough about mutual funds to start investing while being a college student working part time as a waitress is a feat very few others in your position would even attempt to accomplish.

    Your early and continued success with stocks during the dot com years shows a level of insight far beyond your years. Most people did well with buy and hold strategy then but you are actively trading stocks, do doing it well, not to mention the keen insight of sensing the turn of the market which you followed up with great short timing!

    Ending that period with $150K when you were a newbie clearly makes you a natural talent in this. =)

  11. Sandor Schoenmaker says:

    Very Nice and educational to read. Im currently getting started on my traders path, and love to read the stories of succesful traders. This shows people new to the business that if you are willing to work hard and be dedicated, you to can create consistant cash flow. I’m currently taking the swing traders course by Scott Redler. I want to learn how to fish every day.

    I will continue to follow you, and study the way you trade. You are truely inspiring, and a great person.

    Sandor

  12. Manny says:

    Angela can you further comment on the option strategy you learned at the Zanger seminar? are you buying OTM or ITM options and since spreads are so wide or options reprice so quickly whats the optimal buy points for them relative to your technical analysis? Thanks.

  13. Marko Graenitz says:

    Great story Angela! As mentioned earlier on Twitter: If you wish to publish your story as an interview in TRADERS Magazine, please let me know.

  14. DLeow (Daniel Leow) says:

    Thanks for sharing your inspiring life journey esp on trading. I have been following you on StockTwit. I found your calls and warnings are pretty acurate. Though I seldom trade by them as I am looking at longer time frame, They are very helpful for me to look back on my own and do some risk management.
    I learnt one thing in trading – You have to be a successful trader before you can trade successfully. So, forcus to be the person and the result will follows. I’m sure you have done so. I’m working hard to be one too.
    Being a Chinese myself, I understand your verses. I know how you feel to be far away from your family and love ones. Good thing is, with current technology you can always fly home and get connected to trade from afar.
    Do take care always, and cheers.

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