How Dan Zanger Uses eSignal
My trading style incorporates the identification of volatile stocks in the market with profitable chart patterns, and I use this information to swing trade stocks as they emerge from defined patterns. (Swing trading involves buying a stock as it emerges from defined bases or patterns, such as a Bull or Bear Flag, and holding them for a maximum of three to six days.)
While swing trading is my most treasured style, one needs to keep in mind that not all styles of trading work in all market conditions. Often, stocks need 10 to 15 weeks to fully appreciate in price. Through various time frames, I study the action of a stock’s behavior as indicated in its chart patterns. Watching and understanding this "action," however, takes patience and years of experience before one can fully understand how this behavior should dictate how one should trade the issue.
My most informative trading tool is the accurate interpretation of a stock’s trading volume throughout the day. eSignal provides me with the lifeblood of my trading style. I use eSignal’s quote page and the (aVolume) feature and compare it to a stock’s daily average volume, so I can quickly gauge disparities and unique changes of volume throughout the trading day.
I look judiciously at a stock’s volume to see if its volume is far ahead of its daily average as it is under accumulation, or is the stock moving on below-average volume? Conversely, I look to see if a stock is moving lower (distribution) on heavy volume, or is it moving on lighter-than-normal volume?
I rely on eSignal's volume on its quote page for this information. No other data provider can deliver such precise data during the day.
With eSignal, I also set price buy or short point alerts a day or two in advance of a potential move so that I am notified when a stock breaks through a buy point or breakout point. With just a click of the mouse, I can access a multitude of charts, and see if the stock’s chart pattern is correct or healthy, using any time frame or time duration.
As another barometer, I identify powerful percentage changes in earnings and revenue to spot emerging winners. Typically, most of my stocks have earnings and revenues up 100% or greater, with a small number of shares that float. These characteristics cause stocks to have large changes in price in shorter periods of time as The Street reacts to announcements about the company.