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How The Biggest Retail Traders Got Rich


This blog post may surprise a lot of traders, or at least freak them out.  Because that’s what this info did to me when I first discovered it.
If you want to make it big in the market then you are going to have to risk EVERYTHING.  This "EVERYTHING" includes Your time.  Your patience.  Your friends.  And Ofcourse  your trading capital.
Why?  Because the market thrives on risk.
The most common trading advice about diversification — about how you’re supposed to create a portfolio that includes multiple investments in order to reduce risk and put no more that 2-3% of your total trading capital in a single position and buy a bunch of safe stocks that you hold forever?
It’s a lie!
How do I know?
Because, for the last couple of years, I have been researching to find out how the biggest retail traders of all time made their riches — and this research has proven to me that the advice on diversification is very damaging
Not just that, but when I have backtested this info along with some profitable trading methods, the growth is out of this world crazy. I’m talking about concentration, the opposite of diversification.
I’m talking about what Andrew Carnegie meant when he once said:
The way to become rich is to put all of your eggs into one basket, and then watch that basket.
Now, let’s have a look at 4 retail traders who made it really big in the market and let’s see how they did it.

Nicolas Darvas

Hungarian by birth Nicolas Darvas, a professional ballroom dancer in the 50’s and 60’s based his trading decisions on week old telegrams and copies of Barrons while he was on a world tour.
His box method would go on to become famous after his book “How I made $2,000,000.00 in the Stock Market” became a worldwide best seller.
Here’s a chart of one of his famous trades.
Fairchild Camera
Darvas used to put all of his money into 1 or 2 positions that were trading at all time highs and add to those positions on margin.

William O’Neil

William O’Neil Founder of American Newspaper "Investor’s Business Daily" started trading in the 60’s with $5,000.00 and traded that up to crazy heights by concentrating his capital into no more than 4 stocks at a time.
His CANSLIM method of trading became famous after he published his findings in his book How To Make Money in Stocks.

Dan Zanger

 Dan Zanger holds the world record for one-year stock market portfolio appreciation, gaining over 29,000%. In around two years, he turned $11,000 into $18 million by trading low-float highly volatile stocks using regular old chart patterns and putting his entire account (plus margin) into 1-2 positions. He blew up his account a few times along the way, but I’m sure we’d all agree that it was worth it.
Here’s one of Dan’s biggest trades:
zanger 5

Timothy Sykes

Timothy Sykes’ claim to fame is penny stocks. He used to put all of his capital into 1-2 stocks at a time — sometimes holding overnight and selling for huge gains the next day.
Think you’d be able to sleep with over $600k on the line?  Yeah, me either.

In Conclusion

Do you see any pattern in the trading style of these biggies?  All of these traders are/were mavericks.  They all traded a few (1-4) stocks at a time.  They all took HUGE concentrated positions (sometimes on margin).  And they all made it really big.
This formula can be a recipe for disaster in the hands of a newbie. Putting the entire capital into 1-2 stocks with big margin at a time will be enough to make you go nuts.
But in the hands of a seasoned pro, or someone who has spent years studying the market —  it’s also a roadmap to big riches you’re dreaming about — just as those four huge retail traders have shown.
And here’s a final thought.  Trading is a job.  And in every job you are getting paid for something.  it is my belief that in the market you are getting paid directly in proportion to the amount of risk you assume.

Until next time — Happy Trading
Multiplier Wealth

Write comments
  1. Is there anything on Indian context?

  2. Did Rakesh jhunjhunwala,Dolly khanna and Abhishek N followed the same :) ?