Trading $30 Million at Age 25 - The Story of Ted Zhang, Momentum Portfolio Manager

Key Concepts

• Risk Management is Paramount: Effective risk management, including position sizing, trailing stops, and incremental profit-taking, is the cornerstone of long-term trading success.
• Thematic & Catalyst-Driven Trading: Identifying compelling themes and catalysts, rather than relying solely on traditional fundamental metrics, is key to capturing significant market moves.
• Importance of Process & Reflection: A disciplined trading process, coupled with detailed journaling and regular self-assessment, is more important than individual trade outcomes.
• Adaptability & Continuous Learning: The market is constantly evolving, requiring traders to adapt their strategies and remain lifelong learners.
• Leveraging Technology (AI): AI tools can accelerate research and analysis, but should complement, not replace, human judgment.

Early Career & Foundational Principles

Ted Zang began trading in Spring 2020 with $5,000-$10,000 earned from delivery services while pursuing a pre-dental track. He experienced substantial early gains (15-20x return) trading SPACs like VTIQ and CCIV, capitalizing on the influx of capital and retail interest. A 50% drawdown in February 2021 proved a crucial learning experience. He ultimately abandoned dental school acceptances at Columbia to pursue trading after an internship at Rever Asset Management, which manages $400 million AUM, with Zang managing $30 million. A core principle instilled by Don Vandenborg – “He who has a why to live for can bear with almost any how” – emphasizes the importance of strong motivation. Zang defines risk as the potential to lose money and emphasizes that habits determine market survival, echoing James Clear’s principle: “You do not rise to the level of your goals, you fall to the level of your systems.”

Evolving Trading Style & Methodology

Zang’s trading style evolved from random stock picking to a thematic, catalyst-driven, momentum-based approach. He utilizes a modified CAN SLIM methodology, dubbed the “Magic Elixir,” focusing on liquidity (high ADR/volume – minimum 300 million for core holdings), linear price action (respecting key moving averages), a history of large linear moves, and thematic alignment. He employs Stage Analysis (Stan Weinstein) to assess a stock’s position within its cycle and implements principles from Atomic Habits (James Clear) to build positive trading habits. He prioritizes secular themes (technological revolutions) over cyclical groups. Linearity is subjectively judged, but can be quantified by consecutive days without breaking the previous low or respecting the 5-day moving average.

Position Sizing & Risk Management Framework

Risk management is central to their approach. Clients typically risk no more than 0.50% on initial entry, often less (15-25 bps). The “Turbo” portfolio (for accredited investors) allows for a maximum position size of 12.5%, while the “Protection” portfolio (for older clients) limits positions to 8%. They prefer taking more positions rather than being overly concentrated. A key principle is to “never add into a loser, always adding to a winner.” They start the year slower, sizing smaller, and increase positions as a cushion is built. Their target is 2.5% monthly gain (35% annually). They acknowledge that “all correlations head to one” during crises, necessitating strict sell rules.

Trade Examples & Detailed Analysis

Several trades were dissected to illustrate the methodology:

• SNDK (SanDisk): Identified after a 137% gap-up following MU earnings, exhibiting high linearity and fitting all “Magic Elixir” criteria. Multiple entries and partial exits were executed based on high tight flags, expectation breakers, and volume analysis.
• GLD (Gold): Traded based on a 10-year cup with handle pattern and narratives around government debt and geopolitics. Multiple trims were executed based on breakouts, consolidations, and signals from futures charts.
• Nugget/GDX (Gold Miners): Nugget, a leveraged ETF, was traded with smaller position sizes, adding on reclaims and using stops at the low of the range. A mistake was acknowledged – holding onto a portion of the position after a shakeout.
• Silver: Exhibited a parabolic move, with profits taken incrementally using the 10 EMA as a trailing stop. Futures charts were preferred for silver due to better liquidity.
• RMX (Rare Earth Minerals): Identified based on a linear move up in a stage two uptrend, following a stage four decline.

Tools & Processes

The speaker utilizes multiple scans (DV Leader Scan, Highest Volume Daily Scan, 20% plus move verse, proprietary momentum scan) and AI tools (Comet Browser) for research. Technical analysis focuses on constructive consolidation, breakouts, reclaims, and moving averages (10, 20, 50 EMAs). A detailed daily journal is maintained, with quarterly and annual reviews. Situational awareness is maintained through constant monitoring of market conditions and economic data.

Conclusion

The speaker’s success stems from a disciplined, adaptable trading process rooted in robust risk management, a focus on thematic and catalyst-driven opportunities, and a commitment to continuous learning and self-reflection. The integration of AI tools enhances efficiency, but the core principles remain grounded in fundamental market understanding and psychological discipline. The emphasis on process over results, coupled with a strong “why” for trading, provides a framework for navigating the inevitable challenges and achieving long-term success in the markets.