Swing Trading a Choppy Market. How We Do It 6 Mar 6:49 AM (26 days ago)
The Nasdaq has now fallen over 10% from high to low over the past couple weeks in a choppy consolidation so we now have seen a correction for both the Russell 2000 and Nasdaq.
In this weeks blog post, we will go over how we trade a choppy market dealing with a lot of uncertainty and how to avoid large drawdowns that most traders face when trading a market trending sideways to lower.
This is probably the most valuable blog post we have published in a while. So grab your favorite beverage and learn from a successful trader with 20 years trading experience.
Here are the key things to keep in mind.
Stick with What is Working Which is Often a Narrow Area of the Market
Its good to know what is driving the volatility in the current market. Currently, its a growth scare, uncertainty over possible austerity and uncertainty over trade policies for the US and worldwide.
So it makes sense that one of the strongest areas of the market right now is insurance stocks which are less affected by trade.
As we trade daily, we have noticed the good price action in insurance stocks over the past few weeks. And one of the best earnings breakouts this quarter was PLMR.
PLMR is an insurance stock breaking out of a multi-year consolidation into new all-time highs on the back of a big earnings beat with very strong growth. We featured the stock near a good entry point and it quickly reached that entry point and moved higher from there. We have already taken some profits and raised our stop to ensure a profit on the trade using the tactics taught in our free swing trading primer.
But its important to know what areas of the market are doing well despite a choppy market or market pulling back. The highest relative strength stocks often (not always) lead the market higher in the next market rebound.
Wait for Your Pitch. On Second Thought, Wait for a Gopher Ball
The PLMR opportunity was ideal in a lot of ways. The price action after the breakout was about as good as we have seen this quarter. The earnings breakout trade easily hit the first profit target taught in the rapid account growth course while holding a very tight stop below the technical entry point which is a good sign.
So wait for an ideal trade in an area of the market holding up well currently. We focus on the top earnings breakouts and high tight flag breakouts. In general, we only trade the top 20% of high tight flag breakouts. The ones that pass all of our rules pre-market the day of the breakout.
Sticking with just these ideal high tight flag breakouts, also taught in the rapid account growth course and new trading boot camp, overcomes the worst problem in choppy markets. Overtrading.
Its also important to keep in mind that sometimes the best trade is cash.
Trade Less, Make More
Overtrading and revenge trading are the worst things you can do in a wild, choppy market with sudden swings in either direction. Having a clear checklist of exactly what you are looking for with a series of quantitative checks that need to pass before considering a trade is important right now.
You should already know what strategies tend to work at least OK in a choppy market. We have already discovered that for ourselves through a lot of extensive research and experience. Trade everything right now and its easy to get hit with a big drawdown.
Only about 1 ideal high tight flag breakout and earnings breakout comes up per week on average. Probably less than that right now.
By having a careful set of rules of what is an ideal trade that only comes up once per week on average, you crush one of the biggest obstacles holding many traders back. Overtrading and revenge trading at the worst times.
So you may want to take your strategy, increase the qualifications of an acceptable trading opportunity, and trade just those. You want opportunities that come up rarely enough to prevent overtrading.
Nearly all long strategies will have a lower win rate in this environment. Using a position size calculator, plug in the lower win rate and you will see that the position size should go down.
Let Trades Play Out with Very Few Exceptions
Once you prevent overtrading using the methods above, another mistake is to not let your trades play out. We would avoid late Friday morning entries right now because a lot of news can come out over the weekend, but we should let the trade go all day at least.
If the catalyst is a monster earnings beat, we would just let the trade play out with the stop and limit order for the target sell price even if it breaks out on a Friday. Its easy to ruin profitability by taking trades off early.
The stock is going to be more volatile in a choppy market and we should only take the trade off if there is some seriously bad news that is hitting the market. Tariff updates are generally not enough to take the trade off.
We use a 2.5% to 4% stop-loss with the rapid account growth strategies taught in the course (short-term swing trading strategies) so we can just put in the stop-loss right away and go find something else to do. The stock often holds while the market suddenly drops 2% to 3% because we trade with a big bullish catalyst going on for the stock.
But its more effective to just let the trade play out with your stop in place rather than watching it minute by minute when using the tight stop-loss.
We also take more off at the first profit target in a choppy market consolidation or pullback with higher volatility. Stocks just are not going to take that next leg higher right now in most cases with the volley of news raining down on the market.
So we take more off at the first profit target and raise our stop on the remainder.
Focus on the Very Best Strategies. Forget Everything Else
Its a good time to avoid lower win rate trades. Newer issues, stocks below $25, commodity stocks where the commodity is not in a strong uptrend on all timeframes. These are just a few of the lower win rate areas of the market. Also, more disasters like surprise capital raises tend to occur on lower priced stocks in this type of market.
Instead, we just sit back, check our watch lists each day, and wait for something that checks all the boxes. Then we consider the trade which often goes surprisingly well.
2nd tier, or 3rd tier opportunities or if we break our trade qualification rules? Not so much.
Again, reaching for other trades that are not ideal is a a sure way to risk a large drawdown. Penny stocks or buying options instead of the underlying stocks? No way in this market.
Using a ranking strategy or just buy and hold? You can expect large drawdowns and you want to have a plan ahead of time for when the large drawdowns occur. One plan it to just ride it out if using a buy and hold strategy. But the last thing you want to do is turn a trade into an investment. Investments require a lot more research and legwork before entering a stock.
However, if you are using technical strategies on top stocks (such as the ones taught on this site), you should be able to achieve a much smaller drawdown using the tactics discussed here.
Keep Tight Stops. You Have to Manage Your Risk Tightly in a Market Like This
One of the problems with trading options in this market is that the market can switch on a dime. Suddenly, the excess option premium vanishes and the lower liquidity of options and wide bid/ask spread could mean you are stuck.
Again, we want to be able to manage risk tightly in a choppy market environment. We focus more on our short-term technical strategies that use a very tight stop stop with appropriate position sizing given the expected lower win rate.
We also usually avoid the first 5 to 10 minutes of the trading day when entering a trade in a choppy market. The increased overall market volatility and high volatility early in the market day can be a bad combination. Especially on lower priced stocks and stocks with lower volume on average.
But what if you miss an ideal entry by waiting?
So what. There will always be other ideal trades that come up in better market conditions. Not when we want them to, but when they come up when market signals are flashing green.
This is why we have to have a good daily routine including checking our watch lists each day. Patience is key right now. Becoming a successful trader includes learning discipline and patiently waiting for just ideal trading opportunities while doing the work consistently along the way.
Look for Signs That the Market is Entering the Next Uptrend
Eventually, the market will show signs that it wants to go into the next market uptrend. The bullish market signal we look for occurred in early April of 2020, early 2023 and May of last year.
Once you get into a trending market that is above all the key moving averages, it could be a bonanza. For instance, the ideal high tight flag breakouts that we trade went on a huge run last summer until early August as the market went through a trending phase.
This is where the big money is made trading and its important to pick your markets where you want to get aggressive. Not when you feel like it but when your strategy is working well.
Get a Great Coach Now Before the Next Market Uptrend and Huge Trading Opportunities Set Up
There is no better way to quickly get your trading handled than a boot camp run by a very experienced, successful retail trader.
This is a great time to learn so you will be prepared for the next trending phase in the market where the big money is made. Sign up for the 2 week boot camp below. You want to get ready now ahead of the next market uptrend. Not when its almost over.
Bottoming Pattern for a Volatile Market
Our Favorite Strategies for Rapid Account Growth
Reach Your Goals a LOT Sooner. Sign Up for the 2 Week Boot Camp
The post Swing Trading a Choppy Market. How We Do It appeared first on Tradetobefree.
Catching a Multi-Bagger on PLTR. Is it Ready to Bounce? 21 Feb 4:54 PM (last month)
In 2023 thru mid 2024 it was SMCI and NVDA that led the market higher. Since then, investors have turned more from AI hardware to AI software.
MSFT was the darling initially but it was PLTR that took over the mantle as the leading AI software stock. Today lets look at the signs that PLTR gave us that it was about to nearly triple in just a few months time.
We featured multiple stocks that have more than doubled since late last year. Its very valuable to understand the early technical and fundamental signs that a stock is about to take off. Just 1 or 2 of these per year can make all the difference in your investing and trading results.
Early Signs that a Stock is About to Make an Incredible Run
In 2023 and early last year we featured SMCI just before the stock tripled in price within a few months. We did the same with NVDA although it more than doubled instead of tripled within the same timeframe.
In both cases the stocks had already formed a strong uptrend and were in very bullish basing patterns. We featured SMCI right after they pre-announced a huge sales beat. The stock was breaking out of a bullish ascending base pattern after hours. A pattern that often leads to a parabolic move.
The point of this article is to find commonalities among the biggest market winners early in a powerful move higher. What are the early signs? Not that it may break a long-term downtrend months from now and maybe make a big move in a year or two. But what are the signs that its about to take off in the very near future?
This is a question that all traders need to ask and answer. Going for a double or triple within 3 months is not a high percentage trade. Enough singles will give us the same end result with a higher win rate but holding more on the stocks that are showing all the signs of a monster move can also be very rewarding.
Why Did We Feature the Stock Just before it Doubled within Several Weeks?
There are a lot of similarities between the biggest winners in the daily alert service over the past 15 years.
Like many of them, PLTR just reported 30% revenue growth. More is even better. They raised their revenue guidance for their commercial business to at least 50%.
If you looked at the prior 3 years of cash flow, you can see the very rapid free cash flow growth over that time. Another classic sign. They also raised guidance the evening we featured the stock.
No Overhead Resistance Means No Ceiling?
One of the biggest advantages of this trade was the fact it was suddenly breaking into new highs after 3 years of not clearing these levels. As explained in the last blog post, you want to look at a long-term chart when sizing up a trade.
Its normally best to have no overhead resistance. We mentioned TEM a few weeks ago in the closing comments in the daily alert. But you can study those breakouts on TEM over the past few weeks and see how much cleaner the breakout was after it was just below highs.
Before it reached the highs you can see how it broke out, dove lower or gapped lower the day after the breakout and then broke out again. We want stocks that have clean breakouts so we can manage our risk tightly. If you need a 15% stop and it hits that level, its a bad place to be when trading.
Stocks with growth and other key factors with no overhead resistance have cleaner breakouts more often. You cannot let your losses run when using technical trading techniques. It just doesn’t work in our experience.
The biggest winners over the past decade in our service tend to reach a good technical entry point and not look back. In other words, they tend to hold a 4% (or less) stop below the ideal technical entry point after a big catalyst. SMCI did so last year and the year before just before it tripled. TSLA did this in 2020 multiple times. And APP and PLTR did so last quarter.
This is a key early sign that it could make a much larger move.
So this was one of the signs that PLTR was more likely to make a big move when we featured it to customers in early November. It held a tight stop below our entry trigger price and had no overhead resistance.
The Stock has already Built the Confidence Among Investors
Palantir had just crossed a 4 year threshold which is a good milestone to start looking at a stock to trade. Before then, the stock tends to be more choppy, erratic and will surprise you more often. Often in a negative way.
Its a transition to go from a private company to a public company. Sometimes you lose the founders and sometimes the company just does not perform as well as we would like after going public. After 4 to 5 years a stock can become more proven and desired by investors when the stock performs well and especially if it can make it to new highs.
So this was another good sign for PLTR and APP and why we featured them right after great earnings news with an improved outlook.
PLTR had Strong Growth and was Profitable
Another good sign to look for. Usually, 10% growth or “maybe they will turn things around soon” is usually not going to cut it for a monster move. Maybe 10% to 25% but the really big winners that play out quickly usually have the rapid cash flow growth, strong sales growth and often recent accelerating growth.
Stocks that are not profitable will more often drop suddenly days or weeks later. Solid and quickly improving fundamental factors help to support the stock and separate them from the typical low quality pump and dumps we want to avoid.
It also helps that it was the leading stock in the markets #1 theme. AI.
A Strong Start is Another Clue
When they get off to a strong start by quickly moving 25% higher or more within a week or so out of a consolidation with news, this is an early sign that it could be a multi-bagger. Not a great win rate for that, but it increases the odds more than you think.
A slow, reluctant start to the trade is a sign that it may be a single or double but less likely to be a homerun trade. At least in the near-term. Again, we are looking for the double or triple within several weeks or few months. This is always much better than waiting 5 years for it. Or, holding it for years only to lose money on it going into a recession.
If you are a homerun trader, the quicker the better so we can get into the next ideal trade in a bull market. This is the whole goal of trading versus investing along with tighter risk management.
We would use ideal technical entry points and a very tight stop on these opportunities. Its like fishing for an 800 lbs. tuna. You have to find the right spots and keep casting until you hook a big one. You don’t know if its a big one until after it starts to move after taking the bait and setting the hook.
Charts courtesy of StockCharts.com
Price is Everything
If you look at the biggest moves in market history, you see that the 10 bagger, 30 bagger and 100 bagger stocks do not start at $5 a share.
Some people are fooled perhaps because they look at a current long-term chart that is split-adjusted. So, no, Tesla did not IPO at $1 a share. It looks like this on a chart currently but that is because the stock has split so many times. The stock finished the first day of its IPO at around $20 a share.
This is actually lower than the average. Most great stocks are $30 to $50 or more before they really take off. Just look at SMCI and NVDA in 2023. ELF and CELH were also trading at a higher price before they started to trend strongly higher for up to a year or more.
Price is everything. The higher the better as long as the valuation is within reason. The best ones often look a little expensive before they take off such as Tesla in 2020, NVDA in 2023 and PLTR late last year.
When to Sell
As discussed in a prior article, a good exit is the test of the 20 EMA area and selling into the next rebound for a swing trade that often lasts several weeks. This worked nicely on PLTR, RDDT and APP last quarter.
Commissions are now free so we can take some profits early in the trade and raise our stop to a little below the technical entry point. The biggest winners tend to hold that level on a re-test and rebound strongly while holding a tight stop just below that level. Usually the biggest ones do not even retest the entry point as they make their enormous move higher.
Another approach to hold these big winners longer while managing risk will be covered in the boot camp coming in March.
Be sure to enter your name and email using the link below to receive a special invitation to take part. We will be spending a lot of time discussing the best ways to get into and manage these monster winners when they show the above and other early signs covered in the boot camp.
Where Will PLTR Go Next?
We featured PLTR as an earnings gamble a week or so before the latest earnings report. The stock hit the 30%+ profit target soon after earnings which was a big beat and raise. It also held the stop listed in the service for those looking for another 20% on the trade.
But the difference this time around was that the stock did not hold a 2% stop below the technical entry point after the earnings report. It pulled back much further which is a sign that the stock is probably not going to make another enormous move for now.
This is more of a sign that the stock may make that more typical 10% to 25% move further before going into a longer consolidation. And that is what we have seen starting over the past few days. Perhaps we will see another push higher but the stock is likely to go through a well deserved consolidation period soon if it has not started already.
Get Notified of the Boot Camp Coming in March
Our Favorite Strategies for Rapid Account Growth
How to Sell Into Strength on a Trade that Lasts a Few Weeks or More
The post Catching a Multi-Bagger on PLTR. Is it Ready to Bounce? appeared first on Tradetobefree.
The Importance of Long-term Charts When Swing Trading 12 Feb 8:59 AM (last month)
One of the smartest things you can do when first looking at a swing trading opportunity is to bring up a 10 year weekly chart of the stock.
A long-term chart can tell you how successful the management team and business model has been over the longer-term. The long-term trend is also a powerful guiding force that a lot of newer traders overlook.
How to Know Which Direction a Stock is Likely to Head
One of the worst pieces of advice I have heard over the past 20 years is that what a stock has done in the past does not matter – only where it is going. Or, worse yet, prior success is a bad omen for future success because now the bar is set too high.
So a stock that has lost value consistently over the long-term is OK and does not matter when considering the future potential of a stock is what that infers.
Our response?
Sure. So glad we never took that advice.
Get Off to a Better Start
Meanwhile, many of the best traders in history will tell you to avoid stocks in long-term downtrends.
Paul Tudor Jones, for instance, is famous for saying nothing good happens below a 200 day moving average. And he is considered one of the best traders of all time. Other great traders we have studied have similar attitudes about stocks in long-term downtrends.
We would add that a stock below a declining 200 day moving average is even worse.
So one of the first steps to better trading is to focus on stocks above a rising 200 day moving average. And, yes, the past does matter because it tells you if you are dealing with a successful management team and business model over time or not.
By default, this steers you clear of stocks below $5 because they have to get to those prices somehow. Unless there has been a recent large market crash, why would the stock be at those levels?
Another Good Reason to Start with a Long-term Chart
Another great reason to start by looking at a 10 year chart is to see if there are larger patterns in place that could be either bullish or bearish.
One of the biggest trades we nailed for customers so far in 2025 was found with the help of a long-term chart. The stock was OPFI.
On a daily chart we can see how the stock was forming a high tight flag pattern. One of the best patterns covered in the new rapid account growth course.
Charts courtesy of StockCharts.com
Once we look at a long-term chart, however, we also see another very bullish pattern. A large, sweeping rounding bottom pattern.
Charts courtesy of StockCharts.com
The classic entry point in the rounding bottom pattern is a move above the left lip of the cup shaped pattern. A typical target would be calculated by taking the size or height of the cup shaped pattern and projecting that height from the top left lip of the pattern.
So the stock had reached the technical entry point in the rounding bottom and was going through its first consolidation after that point. A great time to take a look at it for a potential trade. It was also near the entry point in the high tight flag pattern.
After featuring OPFI near a good entry point in both bullish patterns, the stock quickly reached our entry trigger and 34% profit target within a couple weeks while holding a very tight stop-loss below the technical entry point.
The Lesson to Apply to Future Swing Trades
So just by starting with a 10 year chart, we could see the very large rounding bottom pattern forming over the past three years.
In a prior blog post we talked about how the best chart pattern is a stock with multiple very bullish chart patterns on different time-frames with matching fundamental factors. In this case, it was a high tight flag pattern formed on the right side of a large rounding bottom pattern. The price often takes off as the price trends higher on the right side of the large cup shape pattern.
The other key to this trade was the Zacks #1 rank of the stock indicating the relatively strong rising estimates versus the average stock in the market.
Also, banks and financials are helping to lead the market currently. So money is looking for stocks in this area of the market. And the valuation seems to be within reason.
Our Favorite Strategies for Rapid Account Growth
Identify and Trade the Rounding Bottom Pattern
The post The Importance of Long-term Charts When Swing Trading appeared first on Tradetobefree.
How to Profit Swing Trading in 2025 28 Jan 2:22 PM (2 months ago)
The best time of the quarter has arrived!
Earnings season offers one great swing trading opportunity after another this time of the year. From late January through early March we will see a lot of great companies deliver blowout quarters with a big guidance raise.
The challenge is to find the 1% of good stocks that will have the best quarter and improved outlook. A lot of good and bad news can come out in an earnings report and conference call causing a big gap and follow on move to the upside and also the downside.
Fortunately, the best swing trading opportunities come up right after the report as we have discussed many times on the blog.
Last year it was SMCI and POWL that made huge 100%+ moves right after appearing in the daily alert service and after the earnings report and after reaching our entry trigger the next day.
No need to guess the 1 in a 100 that will have the game changing earnings reports and outlooks or other announcements.
How to Profit More When Swing Trading in 2025
In the last blog post, we talked about the trading game plan for 2025 and the best way to prepare to succeed at anything.
The best way to prepare is to have a great coach to show you a great strategy and how to execute it. What to expect, how to get past typical sticking points and how to improve on your results. Someone who can look at your personal challenges and find the right remedies. They are well worth it.
Many of you filled out our recent questionnaire on what type of trading boot camp and coaching program you would like.
If you have not yet filled out the questionnaire, take just a couple minutes to fill it out now by clicking here. Help design your perfect boot camp to accelerate your results trading!
Learn What Really Delivers Results When Swing Trading Without the Fluff
The new boot camp will tackle all the issues we typical see when starting to use our strategies.
For instance, overtrading is a big problem for most traders. This boot camp will neutralize that quickly and have you focusing on just the ideal swing trading opportunities with our highest historical win rate and upside potential after 20 years of trading.
The rules are very straightforward as explained in the rapid account growth course, but its easy to miss one or two when first starting. Even experienced traders make these mistakes which we will be covering in more detail.
Nothing beats looking over the shoulder of a successful trader each day and see exactly what they do and why. A lot of nuances that a trading course just cannot deliver.
The new boot camp will have daily videos during the best time to trade – earnings season. Videos covering pre-market prep in real-time along with a video later in the day reviewing the trading opportunities that day, what we did and why.
When Trading, Patience is the Key
In the boot camp we will be diving into more detail about what a typical equity curve looks like for a great trader. And how patiently waiting for the best opportunities is the key.
How to manage risk like a pro and what to expect when swing trading the best strategies.
How to go for the home run trade and when its a good idea. And how to make a fortune quickly with just base hits which are much more common with a higher percentage win rate.
The trading boot camp will have a very focused list of rules for each top swing trading strategy and why we use these rules versus generic strategies and the latest shiny object that do not really work long-term.
Save by Using Free Tools
When starting, there is no need to pay for expensive tools. Your online broker and some free sites will have everything you need. In the boot camp we will be going over the best free tools to use with our strategies and walking through exactly how to use them each day. Many of the strategies can be used from your smartphone wherever you are.
Some newer traders will spend thousands per year on expensive trading tools. Pricey tools that are not really necessary. This boot camp will help you become very profitable first so you can easily afford whatever tools you want later on.
We will also be going over how trading the stocks we do can save you a bundle over other strategies.
Get the Ideal Trades Setting up Each Day
There are hundreds of high tight flags setting up right now that are great for rapid account growth. This can make it more difficult to keep up with all of them.
Each day we will be going over the ideal high tight flag breakouts setting up, the pluses and minuses of each trade, how to identify good technical entry points and which ones are more likely to be a big home run and which ones are good for a great base hit or double.
We will also be going over earnings eruptions trades and earnings breakout trades setting up.
Group Coaching
Send us your prior trades using our strategies and we will help you diagnose problems and come up with a plan to overcome them. Also, we will answer your questions you have pertaining to how to execute the strategies.
These strategies, when properly executed, are by far the best I have ever used over the past 20 years. And they are great for newer and experienced traders alike. Either way, you will add some great strategies to your arsenal to help your quest for an amazing 2025 trading.
Later in the day, we will have a video going over the trades that day and covering how we would trade each in depth. We will also be talking about the market conditions in general.
One-on-one Coaching
We will also be offering one-on-one coaching so we can look at your schedule, your strengths, how much time you have each day to trade and when, and your prior trades to get you on the right track quickly in 2025.
Having a coach there to answer your questions is important for the fastest start possible. Not correcting certain mistakes early on will cost a lot more than the cost of the coaching.
Our goal is to take you trading to the next level as quickly as possible no matter where you are in your trading.
Day Trading
In our research, the best swing trading opportunities average over 5 times the profits of the best day trading setups. And these are the best day trading strategies we found in our own trading and research over many years.
So you can greatly reduce the number of trades to reach your goals by focusing on the best swing trades.
However, for those who want to add some day trading during earnings season, the boot camp will cover our 2 favorite day trading strategies in detail. Including strategies we have never shared before in our courses.
We will also go over popular strategies that did not work in our testing and hundreds of trades over many years. Our new trading boot camp will also get you off to a great head start if you want to day trade as well.
Get a Glimpse at Our Latest Strategy for Bear Markets
In a prior blog post, we went over what strategy tested the best during the 2022 bear market. The initial study looks very promising and we will be giving you more data and a great overview of the strategy during the boot camp.
The boot camp will be delivered in a series of webinars, videos and emails as most traders asked for in the survey. These will give you immediate access to this valuable and timely information as we trade live during earnings season.
We will be sending out a special, discounted offer for those who sign up for the early bird notification list. Just click the link below to get the time and dates for the new boot camp and the special discounted offer to sign up when available.
Get More Information on the New Trading Boot Camp
The post How to Profit Swing Trading in 2025 appeared first on Tradetobefree.
Our Top Swing Trading Strategies for 2025 4 Jan 4:00 AM (2 months ago)
The feared sell off in early 2025 has turned into a 1 day affair so far. After a good year for the market you often see investors waiting for the first of a new year to sell to put off taxes on the winners for another 12 months.
So far our top swing trading opportunities for the new year are taking off despite this tendency. The price action looks very good so far in 2025.
We were pointing out to customers that its possible that taxes could be lower in the future given the election results. Plus its more likely now that the market will go higher in the years ahead with more pro-growth policies over the next four years given the election results.
So perhaps its far too early to sell leading stocks like normally happens early in a new year. Or, there is just too much buying demand just under current prices to have much of a pullback in early January given the improved economic outlook for the years ahead.
Today lets talk about how we will be taking full advantage of a bull market swing trading in 2025 and beyond. For as long as it lasts.
What Not to Do When Swing Trading in 2025 and Picking a Strategy
If we learned anything from 2023 and 2024, its that listening to financial media and using that to determine your swing trading strategy for the road ahead is a bad idea.
It sounds like a broken record but 2024 also reinforced the notion that macro expert and economist forecasts are right only about half the time at best. We never did see that small cap leadership really. Small caps barely had a double digit year and had less than half of the returns of large caps overall.
Another key lesson is that bad sentiment is often bullish and overly bullish sentiment can be bearish for the weeks ahead.
In any case, the year did not start with a big selloff. We could see sudden news that negatively affects the market, especially early on in a new administration and new congress and during negotiations on trade, but those should present buying opportunities for us when swing trading.
Fears That Held Investors and Swing Traders Back in 2024 and Again in 2025
The biggest argument right now for the bears is that valuations are stretched. The forward P/E ratio of the S&P 500 is close to 23 times earnings which is high compared to the historical average which is around 18 over the past 20 years.
However, there is a strong tendency for market P/E ratios to make higher lows and higher highs as a bull market wears on. We saw this in the 1950s and 1960s bull market. Also, in the 1980s to 2000 bull market. And we have seen this since the financial crisis as well.
Its true that high P/E ratios can be a bad sign for long-term investors but its actually a good sign for long swing traders in the shorter-term.
The best markets for our strategies tend to be those with high forward P/E ratios. The late 1990s is a good example along with 2020. The median P/E ratio of the S&P 500 is actually a lot lower and the big tech stocks that increase the S&P’s average P/E are actually growing earnings strongly in most cases.
The other trend not talked about in the financial media is that the max P/E ratio (before the eventual market top in each long-term bull market) in each 20 year cycle continues to grow. So its entirely possible we will see the forward P/E ratio of the S&P 500 top out at a much higher level ahead of a major market top. Meaning, a level higher than what we saw in 1999 which was around 35 times forward earnings.
So, yes, the market could become nearly twice as expensive over the next several years. If this were to occur, it would likely correspond with stronger productivity and much stronger earnings for a time. We saw this productivity acceleration in the late 90s.
We actually may be entering the best part of the cycle to swing trade. The later portions of the cycle are often when the most millionaires are made trading. Similar to what we saw in the late 1990s.
And keep in mind that the median P/E ratio for small caps is around 10 while the median is around 17 for the S&P 500. Normally, small caps sell at a premium to large caps.
So if small caps start to lead the market and their median P/E catches up to the long-term normal differential, we could see a profit bonanza for good swing traders in 2025.
The Top Chart Pattern We Will be Trading in 2025
Today we saw CRNC break out of the most bullish chart pattern. A high tight flag. The stock soared over 80% from one of the entry points taught in the new rapid account growth course the same day.
So, yeah, we will be trading high tight flags this year to be sure. Some of the best small caps will be gravy out of this pattern as long as the bull market continues. The course goes over how we determine when to move to cash.
We saw an incredible win streak over the summer on the high tight flag breakouts that met our strategy rules in the new rapid account growth course. Once a hawkish Fed pivot is complete and the bond market settles down, we could see another amazing period for the strategy.
Its not a pattern you want to trade without a good set of rules as to when to enter and exit the trade. Only about 25% of high tight flag breakouts will meet the course rules pre-market on the day of the breakout. The ones that do not meet the rules at that point have a less than 50/50 shot of being successful after looking at over 100 high tight flag breakouts.
Top Stock Trading Strategies to Start 2025
One of the biggest advantages of the strategy is that 75% of the time the trade is over within just over 1 trading day if you take the entire position off at the first profit target. If you take the entire position off at the first profit target, the average is over 5% per trade averaging the wins and losses in multiple back-tests over different market conditions.
So this allows you to take a profit more quickly and get ready to trade the next ideal high tight flag that come up more often this time of year. This is how to achieve exponential account growth during a bull market.
If you use the optimized exit strategy taught in the course, the average winner was around 10% with about a 3.5 day hold time on average. The best strategy we have tested by far.
Right now there are hundreds of these extremely bullish patterns setting up and nearing a good technical entry point.
At 5% per trade, averaging wins and losses, 15 is enough to double your account using the rule of 72. Pretty incredible potential while using a very tight stop-loss. We see about 1 ideal breakout per week on average. More during earnings season and fewer outside of earnings season. Earnings season starts later next week.
Given the first back-test about matched the results in the second back-test and based on our own trading every day, we will definitely be using this strategy in a bull market as long as the market holds up well enough in the months ahead. Until the Nasdaq is in a correction, this will be a go to strategy for us in 2025.
The strategy has a test for the current market trend and level of volatility that needs to pass in most cases before we use it. This test is easily being passed recently and we are seeing great price action on breakouts to start the new year.
Again, 75% of the time we will be back in cash in just over 1 trading day using this strategy per the recent test results.
This means we will likely be sitting mostly in cash or our favorite market etf half of the time or more waiting for the next ideal high tight flag breakout if the strategy continues to perform about the same as during the prior 2 back tests that were performed over time periods with multiple market corrections.
This reduces the time we are exposed to overall market risk while trading the most exciting opportunities with a ton of profit potential while using a very tight stop-loss on each trade. Its very tough to beat this strategy.
Another Great Strategy for 2025
As most real traders know, the big money in trading is made during earnings season. This is when investors get the most information about the health of a company in an earnings press release and conference call that usually occurs right afterwards.
The biggest earnings beats and guidance raise on the top growth stocks will often produce a large gap and go pattern. These top echelon earnings gap trades are the next area of focus for us in 2025.
The earnings eruptions strategy goes over how we identify these ideal setups. Recently, APP and UNFI met the rules in the course and were big winners using this strategy. Again, its a strategy where you are targeting an ideal opportunity on a trade that normally lasts just a few days or less.
Its also a very high percentage trade in our back-testing and in our own experience trading. It had the best win rate last quarter.
A Bread and Butter Swing Trading Strategy for 2025
Stocks setting up bullish chart patterns ahead of a big catalyst (such as earnings) are also an area of focus for us in 2025. Again, we are waiting until after the catalyst that is better than expected with a very good outlook before getting long. In a recent blog post we talk about why we favor getting in after the biggest beat and raise quarters on top stocks.
Another focus is stocks in an industry where money is rushing to currently. So stocks with a high industry relative strength is another bullish factor we will be looking for. AI-related stocks are still front and center.
Great double bottoms, cup with handles, flat bases, descending wedges, and flag patterns are on the menu right after a great catalyst. A new market catalyst, industry catalyst, trade deals, leaked progress on tax cut negotiations in Congress or even a drop in the risk-free yield and inflation could be a catalyst.
We will be identifying ideal technical entry points on a daily chart and have the choice to take profits in the first wave higher or keep it for a longer-term swing trade. Or, do a combination of both as commissions are still free with most brokers.
These opportunities come up more often during earnings season which starts up next Friday. Even financials, which dominant the stage during the first couple weeks of earnings season, are ones to watch. Usually, the fun really starts around the time NFLX reports.
A Simple, Effective and Less Time-Consuming Swing Trading Approach in 2025
The 3 Stocks to Wealth strategy on Investtobefree.com is our ranking system approach to trading. Its had an incredible run over the past 12+ years overall.
The first 2 days of 2025 have been terrific for the strategy and service. It had a record month in November ahead of the new year. And January is often one of the best months of the year for the strategy.
The service on investtobefree.com also now has regular videos on the best earnings breakouts we uncover during earnings season. These are potential long-term holds which are even better without the election overhang we had in 2024.
Shorting and Put Options in 2025
The long opportunities right now are doing too well to focus on shorting. However, the market trend could change at any time.
One of the best trades in my lifetime was essentially shorting fannie mae just before it was put into receivership in 2008. But this was only after the long-term downtrend in the market really got going with significant bearish news that kept getting worse.
Fighting the trend when shorting can be a real train wreck as the bears saw in 2024 again. However, if we see a strong bearish signal in the market, we will be looking for the best double tops, head and shoulders patterns and the best downward sloping channels to trade to the downside with fresh, surprising very bearish news.
Eventually the bearish signal will occur but bull markets often last many years as was the case in the late 90s after one of the last significant rate hike cycles that ended in mid-1995 with a mid-cycle slowdown and economic re-acceleration rather than a recession.
Perhaps they will re-write the economic and macro textbooks after the pandemic induced melt up and the big pullback on the other side. In the meantime, we will continue to trade the current market long-term trend. This is usually higher despite all the fear porn online that just seems to get worse every year.
The post Our Top Swing Trading Strategies for 2025 appeared first on Tradetobefree.
How to Swing Trade for Big Profits in 2025 31 Dec 2024 9:59 AM (3 months ago)
In the last blog post we talked about how the election could impact markets over the next four years. Today lets talk about how to take full advantage of the tremendous opportunity we have in 2025. Lower taxes, less regulation and a pro growth agenda tend to be very good for stocks and trading.
Before getting started, its good to survey the market and the best trading strategies to see what is working currently, why, and how this could change in early 2025.
So now is a good time to look at the first couple months after the election and see which strategies are working best after a December pullback.
Trade, Tariffs and Their Impact on Swing Trading
So far you would have to say that stocks less affected by trade policies and rising interest rates are the better place to be all else being equal.
Historically, the market starts to rally a week or two before a major election. And this, along with bullish technical factors, made us more bullish around the beginning of November.
Regardless of the election outcome, we found 2 AI stocks that were likely to do well and were less affected by the election and trade policy. Both stocks had a recent bullish catalyst as well and were coming out of good consolidations within strong, long-term uptrends. The stocks were PLTR and ALAB.
These stocks fit the mold of an ideal swing trading opportunity. A great first step to prepare for 2025 is to go over this blog post which covers how to find great swing trading opportunities in detail.
These stocks had nearly all the qualities mentioned in that blog post. Strong growth in sales and earnings, a long-term uptrend, a bullish consolidation pattern, a fresh catalyst, and the stock confirmed the near-term direction to the upside as described in the earnings eruptions strategy and the daily alert service that evening when they were featured to customers.
Stocks and Proven Strategies Getting Us Excited Heading Into 2025
Both stocks have soared over 50% since reaching the technical entry point mentioned in the alert service. ALAB was a recent IPO but one that was turning profitable with exceptional growth in a red hot industry. Like RDDT, another stock featured to customers recently, this recent IPO had very good recent price action for such a young stock.
Other stocks that have done exceptionally well also had the ideal characteristics of a great swing trading opportunity.
We featured NFLX earlier which has also done well. Another stock near all-time highs with strong growth while being less affected by uncertainty over trade policy.
Other stocks affected by higher interest rates and trade policies have been pulling back and consolidating. Even NVDA is consolidating for now ahead of trade negotiations heating up. These other areas of the market could be ready to take off once the new trade policies and tariffs start becoming clear.
Get Ready for January
January has always been one of the best months in our own trading and for our strategies. Its also one of the better months for the market historically.
So pay attention in January. Its a great month to trade. Earnings season also starts in mid-January with some pre-announcements sure to come out earlier in the month. These catalysts are a key ingredient in a great swing trading opportunity as described in the blog post mentioned above.
Last year in January we featured SMCI right after a pre-announcement for customers coming out of an ascending base pattern. Again, the stock was found using the principles in the guide we have on finding the best swing trading opportunities in the market. The stock tripled within several weeks after reaching the entry trigger the next day.
We would not be surprised to see this kind of upside pre-announcement on a great growth stock again in January of 2025. So watch the list of morning gaps for stocks over $25 that are gapping 8% or more and see if there is big news. We will deliver a lot of the best ones in the daily alert service.
How to Exit Great Swing Trades in 2025
In a prior blog post, we talked about how you can exit the very best swing trading opportunities. The ones with the strong growth that get off to a great start. These you can handle a bit differently with at least a portion of your position.
The best earnings breakouts and consolidation patterns on great growth stocks are often in trending mode for weeks or even months after a big earnings breakout. A good, simple exit strategy is covered in this blog post.
Its basically waiting for a test of the 9 or 20 EMA and selling into the next wave higher. Dragging a stop a little below the prior days low after the test of the moving average. If the stock closes below the moving average chosen, we raise our stop to about 1.5% below that days low. The initial stop-loss when first entering the trade is generally a very tight stop-loss for us.
Again, we look for a great start to a trade as a key indicator to know when to use this approach to exiting the trade. Most average or “good” trades we exit much sooner. This approach works well on quality growth stocks in the current market when a few stocks are soaring while most stocks are, well… meh.
Right now its a feast or famine type of trading market.
IPO Market is About to Re-open?
We could also see a lot of good IPOs in 2025. We could see Stripe and SpaceX come public in 2025. These stocks and others could form the most bullish consolidations early on. We like to trade these and exit the trade ahead of the lockup expiration when they tend to start trending lower.
Fresh IPOs can make great moves in those first few months. We then avoid them generally after that until they are trading around 4 years or more with inflation and bond yields this high. The ZIRP era is in the rearview mirror for now anyways.
So watch the IPO calendar closely in 2025 and get ready. This could be a great source of profitability as well. This blog post covers how we trade IPOs.
Save Yourself Time and Become More Efficient
Of course swing trading takes some time when you do it all yourself. Just researching and testing promising strategies can take many months or years. But that is a necessary first step.
If you are trying to grow a small account rapidly, the rapid account growth course teaches you multiple strategies to have a terrific 2025. These are strategies we use in our own account.
Also, check your inbox and the blog for our annual sale for the Daily Alert service. This is the best value offer we make all year. The service delivers a steady stream of well curated swing trading opportunities on great stocks throughout the year.
Stocks and swing trades selected by someone with over 15 years experience swing trading.
The Best Way to Prepare to Have Your Best Year Ever Trading
I recently embarked on a new fitness program and made some disappointing progress over a couple years time. Over those 2 years I listened to podcasts off and on, read books and articles on nutrition and fitness and learned what I could on my own.
I eventually stumbled across key tips that transformed my health and fitness levels. But this was after going to the gym for many years. Suddenly I am much stronger, leaner and in much better shape and feel better overall.
If I would have gone to the right expert from the start, I would have saved years of poor results and gotten to better health sooner. Many of the tips that made all the difference are rarely mentioned online. In fact, much of the advice online did not help and actually hurt my results in many cases.
The same thing can definitely occur when swing trading. The best and fastest way to have a great 2025 is to get a great coach who has been doing it for decades. A coach that is reasonably priced and can quickly get you on the right track.
Right now, you do not want to take years to clean up mistakes and learn the best strategies for you and your schedule. So get a great coach and quickly learn the best swing trading strategies to get a faster start. Its well worth it when exercising and definitely when it comes to trading.
We are putting the finishing touches on a brand new coaching service that can get you to the next level with the best strategies that are working best for us in the current market and have been working for many years.
All we need is your input to help make it the best program possible. So please fill out the following survey if you have not already. It takes just a couple minutes and you will get a special offer on our top strategies we will be using in 2025.
Fill Out the Survey and Receive a Great Offer on Our Top Strategies for 2025
The post How to Swing Trade for Big Profits in 2025 appeared first on Tradetobefree.
The Hottest Swing Trading Strategies Right Now 2 Dec 2024 3:28 PM (4 months ago)
In the wake of a pivotal election with positive implications for the next four years, its important to study which strategies are working best early on.
Its now unlikely we will see a big tax increase over the next four years and a big new spending program is unlikely in the near-term. Regulations, energy regulations and otherwise, are likely to be more pro-growth over the next four years as well.
So now is a good time to look at the first few weeks after the election and see which strategies are working best thusfar.
Our Top Ranking System is Taking Off
The 3 Stocks to Wealth strategy on our sister site, investtobefree.com, just had its best month ever. The same strategy that was about a 30-bagger over its first 9.6 years.
A strategy that was on fire during the last Trump administration. So far, round 2 is off to a much better start.
Perhaps the election overhang ending finally set these stocks on fire. APP and ROOT were 2 of the big winners for the strategy last month. The service yielded more than 5 times the overall market return last month for those who stuck with it through the drawdowns over time.
This could be a sign that factors such as strong growth, earnings estimate revisions, along with a strong trend on all timeframes is now more in favor. The outlook is now less clouded if we are waiting years for a stock to grow sales and produce more earnings.
The Top Strategies for Rapid Account Growth are Doing Well, Except….
The best high tight flags on more established stocks are doing great. Even though UAL is in a commodity business, it still did well out of the pattern. UPST and others earlier in the month made nice moves using this strategy.
The new course goes over which stocks to watch out for and avoid trading in most cases. One of these types of stocks is newer issues.
We define newer issues as stocks that have been trading around 4 years or less. They are still working OK but consistently need about a 35% wider stop-loss than stocks that have been trading over 5 years.
Investors were probably more concerned about how spending would increase and how much taxes would be cut in the years ahead and how that would impact inflation and interest rates. So the bond market reacted with higher yields which made the younger growth stocks more shaky near good technical entry points.
Since the Treasury Secretary nomination, the 10 year yield has started to pull back. So it will interesting to see how the top young growth stocks act in the weeks ahead and if they hold tighter stop-losses.
Longer-term Swing Trades
Its been an ideal environment for the longer-term swing trading patterns given the good news that is likely ahead.
The Weekly Alert service is on a strong run with nearly all of our top featured trading opportunities that reached the entry trigger listed in the alert making a strong initial move over the past six weeks.
Last November we featured ANET to subscribers when we went bullish after a 2 month correction around the start of November before the stock doubled over the next year.
This time we featured PLTR right after a great earnings report at the beginning of November. The stock reached the entry point the next morning and is already up around 50%.
ROOT was featured in the daily alert on October 30th. It reached the entry trigger the next morning and the 33% final profit target within a couple hours. We featured it again on November 14th just before another 40% move higher within a few days as it held a tight stop-loss again.
RSI cruised over 30% from our entry trigger price within a few weeks. APP made another enormous move on a big earnings breakout we featured right after the earnings report and before a 60% move higher within a few weeks.
The 2 Hottest Strategies
The best earnings breakout patterns, ideal high tight flags and 3 Stocks to Wealth strategy are all doing very well right now when following the entry/exit rules taught in the service. And they typically do best from the Fall through early June.
The 3 Stocks to Wealth strategy had a record month in November and requires only 15 minutes on 1 day per week to execute the trades.
To encourage everyone to not miss out we are offering a 50% off Cyber Week Sale on the 3 Stocks to Wealth strategy and the rapid account growth course
Cyber Week Sale – 50% Off!
No sense in just watching this opportunity pass by. This is the time to get started with 2 of our hottest strategies.
The post The Hottest Swing Trading Strategies Right Now appeared first on Tradetobefree.
The Pros and Cons of Breakout Trading 4 Nov 2024 11:25 AM (4 months ago)
We just had 2 big winners last week on ROOT and WGS using our top strategy for rapid account growth.
Both stocks were a little short in one of the key factors in the strategy but were very strong in other areas. These other areas were strong enough for us to give each trade the nod and both were big winners and led to a terrific week of trading.
Those using very aggressive position sizing, often used in trading contests, could have doubled their account in a week.
Both stocks soared 30% within a couple hours after reaching the breakout point and triggered the parabolic exit strategy taught in the new rapid account growth course. Even with small positions for each, we had a huge week while the overall market went lower.
But there are a lot of misconceptions about breakout trading taught elsewhere online and today I wanted to clear those up. This will be a very valuable article from a successful trader with over 15 years experience. So grab your favorite beverage and lets get started.
The Cons and Why Many Traders Give Up on Breakout Trading
Most successful traders that I know use a combination of fundamental and technical analysis when trading.
A lot of newer traders will either fall in love with a stock and ignore the chart. Or, perhaps just as bad, go solely with technical analysis when they are just not as experienced and knowledgeable.
This leads to many traders trading every breakout when they feel like it only to find that most breakout strategies fail to make much over time. If they make anything.
They might look at all the breakouts that form a generic bull flag strategy or perhaps a long enough consolidation and find that the win rate is not very good. They do not like the lower win rate and can get discouraged and give up on breakouts pretty quickly. Especially if they are trading reversion to the mean assets like commodities or forex which tend to have a lower win rate.
However, if you look at the best traders in history, you find many of them focus on breakouts. Many of these traders took around $10,000 or less and turned it into tens of millions of dollars in todays dollars.
What you find is that they just focus more on the best stocks near highs in the most bullish long-term trends and consolidation patterns ahead of the breakout. And avoid certain market conditions.
The Pros of Trading Breakouts
So the best traders ignore most breakouts and have a hyper focus on stocks with the best momentum, great technical and fundamental factors, and breakouts with little overhead resistance.
Last week is a good example of this. ROOT, for instance, was breaking out of a long flag pattern into new all-time highs. It also just had an amazing earnings report just before we notified our customers. The stock reached a good technical entry point the next morning and soared over 40% from there within a couple hours. It was a great 35% profit for those using our targets in the daily alert service.
Its real simple nowadays to put in a tight stop-loss and limit order for your target sell price. Because we are swing trading and not day trading, this trade could have easily been done from your smart phone.
Enormous Advantages of Trading the Best Breakout Patterns
When we first back-tested our top breakout strategy, one thing we noticed early on is that every single trade in the back-test lasted less than 2 weeks. The average time in the trade was about 3 trading days.
We also found an optimal exit strategy that beat the typical exit strategy using a bearish candlestick pattern or a close below a key moving average.
Using a bearish candlestick pattern on a daily chart to time the exit resulted in a MUCH longer trade. More than twice as long, in fact. Also, the win rate was MUCH lower as well.
The problem with this is that you could have your trading capital in another ideal trade during that extra 4 days. Also, the biggest portion of the move higher tends to happen early in the trade.
Also, using the Kelly criterion, a lower win rate forces you to use a lower position size to keep a very low risk of a very large drawdown.
More Ideal Breakout Trades per Week Equals Faster Account Growth
You could do 2 trades over the same timeframe with a higher profit per trade using our exit strategy optimized for todays market. In fact, you could just go for the first 7% profit target and have the average time in the trade cut in half again.
So its possible to have more than 2 full size trades per week and up to 150 trades per year with a high average profit per trade when including the top earnings breakout patterns also taught in the course.
Meanwhile, reversion to the mean swing trades tend to play out over a much longer timeframe, have a lower win rate in our experience, and have fewer big winners due to the overhead resistance.
You want to average 4% to 8% per trade over 3 days or less instead of that same average over 3 weeks to 3 months. The faster the profits occur, the better when trying to rapidly grow a small account swing trading during a market uptrend.
This is a huge advantage when trading ideal breakout patterns.
Only 20% to 25% of high tight flags will meet all our criteria in the rapid account growth strategy the morning just before the breakout. About 4 to 6 ideal breakouts occur per month during at least OK market conditions which is about 80% of the time historically.
Another Big Advantage – The Top Breakout Patterns can Prevent OverTrading
One of the biggest problems facing newer traders is overtrading. This is where a trader tries to trade everything they come across. Some traders will look at a chart and think they see a high tight flag, double bottom or some other bullish technical pattern with no rules on how to identify the best ones.
“It kind of looks like a cup with handle or bull flag so I will just give it a shot” is what many traders think when they size up a trade.
When you do the research to determine what set of factors lead to the highest win rate, you can actual have measurable yardsticks for what constitutes an ideal breakout trade candidate. You can sometimes get these factors down to levels where you can still have a much higher win rate over multiple market cycles while still having about 1 to 2 ideal trades per week.
After spending months of research, you may be able to find a set of measurable factors that lead to a much higher win rate. This normally leaves you with fewer trades per week.
This is much better because most long strategies will underperform near a market peak and when the market goes into a correction, pullback or bear market.
Most swing traders will have 10 to 15 positions on that are doing fairly well only to find nearly all of them going down at once going into a correction and while the market is in a correction.
Prevent OverTrading and You can Greatly Reduce Drawdowns
The ideal breakouts, if they meet the rules in the rapid account growth course, tend to still do well at least until you get into a correction (more than 10% off the 52-week highs on the major indices).
So you have a much higher win rate per trade, a larger average profit per trade, and do not have to scramble and babysit 10 trades going down early in a market downturn.
If you only have a couple ideal trades per week, with a high win rate and average profit even while going into a correction, with an average hold time of less than 3 days to reach your target, you go a long, long way in preventing damage to your account caused by overtrading.
In fact, most breakouts have a pretty low win rate with perhaps good upside potential. So it makes sense to focus much more on the ideal breakouts on the best stocks for breakouts for a much higher win rate while having fewer trades.
We find that we make much more with a lot fewer trades when focusing more on the top breakouts.
In our experience, 1 ideal trade makes as much as 10 2nd tier trades. In other words, 10% of your trades can make 90% of your profits. So focus on those trades with all the factors present that will likely yield a much higher win rate, can move a long way, and play out quickly.
This way you can also be back in cash quickly waiting for the next ideal trade. This way, you can compound your account quickly during market uptrends while still being in cash more of the time.
Its Tough to Lose When in Cash
The other benefit of our top strategy for rapid account growth is that we spend a lot more time safely in cash. Once the trade hits the profit target, we are back in cash waiting for the next ideal high tight flag breakout. Again, the average time in the trade is 1.5 to 3.5 days depending on whether you go for the quick profit or a home run trade.
It may be days or longer before the next ideal trade. Until then, we are safely in cash. If an ideal opportunity comes up that meets our rules, we then go into a trade that will likely play out very quickly so we can rapidly compound our gains outside of bear markets.
Trade all “good” looking breakout opportunities and the win rate is far worse in our experience and back-testing. As long as we have at least OK market conditions, we check all the important criteria in the top breakout strategy before entering a trade. If the trade does not meet all the rules or come close while being very strong in another area while meeting the other rules, we skip the lower win rate breakout trade altogether.
Once a bear market starts, very few of the ideal setups even come up. And we can focus on the best short setups or put option plays if we wish.
This swing trading approach saves a TON of time and gives you a lot of peace of mind once you see how well it works.
Save yourself years of trial and error by using our #1 strategy for hyper small account growth.
The post The Pros and Cons of Breakout Trading appeared first on Tradetobefree.
A Simple Short-term Swing Trading Strategy for Rapid Account Growth 21 Sep 2024 5:22 AM (6 months ago)
Since we went live with the new rapid account builder videos, we have seen many stocks form the #1 technical pattern taught in the new videos.
So far all have been winners using the entry/exit strategy taught in the course. Not so much for the ones that did not meet all the rules pre-market on the day of the breakout.
AAOI, SMMT and many others met the course rules before the market opened on the day they reached the entry point in the strategy.
The stocks that get off to a great start out of very bullish chart patterns often set up multiple bullish patterns where we can enter a trade with a tight stop-loss and great upside potential.
APP is a stock we featured in the daily alert less than 2 weeks ago that met the rules in one of the bonus strategies taught in the new rapid account growth videos. The stock ripped 40% higher within a week and a half after meeting all the rules in the videos pre-market on the day of the breakout. It held a 1% stop-loss below the technical entry point as it rose 40% in just days.
These are the kinds of trades you want to patiently wait for when going after hyper account growth. Lesser quality trades can be a waste of precious time and trading capital.
We will be watching APP for more bullish patterns for subscribers of the daily alert.
In todays blog post, we will go over the simple steps in using the #1 strategy in the new rapid account growth videos.
Step #1 – Build Your Watch List
The videos show you how to use free screeners to find the top performing stocks over the past few weeks, months and years. Once you have this list, you just look for the technical pattern that you can spot very quickly.
If the pattern meets the trend, technical and consolidation rules, you set a price alert with your online broker. Again, this is free with your online broker. No need to spend thousands on pricey screeners and alert services when you first start trading our most effective strategy for hyper account growth.
If the pattern is formed, you also put the stock on your watch list.
Step #2 – Check Your Watch List Before the Market Opens or Just Wait for the Text from Your Online Broker
You can check your watch list each morning for the key factors explained in the videos. If all the factors are present, get ready for a fun ride later that day if the stock reaches the entry point.
The #1 strategy brings us qualified trades several times per month on average. More during earnings season and fewer between earnings seasons. Earnings season comes up each quarter or 4 times per year and lasts several weeks.
Step #3 – Once You Receive a Text, Check the Rules
If a stock reaches the entry point, your online broker texts you immediately.
After receiving the text, you just check a few things taught in the course. These checks can be done pre-market as well if convenient for you.
Step # 4 – Enter Your Orders
If everything checks out, you just enter the buy order in your trading app (starting on a simulator first to gain confidence).
Then enter a limit order and stop-loss order with your online broker. Optionally, you can keep a portion of the position for a potentially much larger profit.
That’s it. This keeps it super simple if you are pressed for time. Again, commissions are free with most online brokers.
Step # 5 – Go Over the Trades to Ensure You are Following Your Rules and Clean Up any Mistakes Periodically
Its real, real simple.
The video below shows how simple the strategy is.
You can even do it all on a smartphone. No need to spend thousands on an expensive PC, monitors and other pricey services and trading tools.
The hardest part is spending months or years to develop the strategy and set of qualification rules for the extremely high win rate while using a tight stop with twice as much upside as downside.
Once you have the great strategy and a set of overall market trend qualification rules, the rest is real straightforward.
Using our top intraday strategy, it would take at least 5 to 10 times as many day trades to equal just one of these swing trades. And that day trading strategy is very good as well.
But it only comes up during earnings season and there are just not enough of them. During earnings season, its better to play only the best earnings breakouts as a swing trade anyway in our opinion.
This swing trading approach saves a TON of time and gives you a lot of peace of mind once you see how well it works.
Save yourself years of trial and error by using our #1 strategy for hyper account growth.
The post A Simple Short-term Swing Trading Strategy for Rapid Account Growth appeared first on Tradetobefree.
Go for Your Own Gold Medal… in Swing Trading 18 Aug 2024 12:46 PM (7 months ago)
I recently listened to a podcast interviewing the current leader in one of the most popular trading contests online. He is up nearly 600% so far this year. This is 7 times his starting capital.
He was talking about his strategy, without giving away too many details, and mentioned he was using 4 to 1 margin on a particular trade. A stock that was trading at around $2.
I nearly spit up my coffee thinking of the incredible risk of using 4 to 1 margin on a $2 stock.
But I went back and checked what our #1 strategy for rapid account growth would have done over the past couple months with 4 to 1 margin. A strategy we use on MUCH safer stocks.
The return was over 1,000% in just the past 2 months using the same leverage he was using. And that is just 2 months instead of the full 8 months it took to grow his account this year.
No Need for Margin to Win When Swing Trading
Now I would never use that kind of margin but some of us have a higher risk tolerance than others.
Fortunately, you could still win the competition without margin at all.
Our top trading setup in the new rapid account growth course is now coming up about 6 times a month. This is more than enough ideal trades to blow away the competition in a LOT fewer trades than what he was doing.
So, yes, you could win the gold medal for trading or whatever the grand prize is for a particular trading contest. Of course, who cares what the prize is when you are filthy rich from exponential account growth.
The rapid account growth course has just been released. As promised, all current and past customers over the past 15 years get a better deal if they act now.
Here are some of the frequently asked questions about the course just released:
I Work Full Time. Will the Course Still Help Me?
The course is meant for the average trader with a full time job. With swing trading, you can easily enter orders from a smart phone and hold for multiple days with a tight stop-loss and limit order in place.
Most traders will do better swing trading versus day trading. Again, swing trading involves holding most trades overnight while day trading involves getting in and out of a trade the same day.
After swing trading and day trading over the past decade, swing trading has been MUCH more profitable. By far. One of the keys to success is waiting for the most ideal swing trading opportunities and not overtrade. This course shows you how.
The most explosive opportunities with the highest win rates (while using a tight stop-loss) come up a handful of times per month on average. It can take dozens of lower quality trades to equal what an ideal trade will do for your account. In fact, many traders will lose overall on the less than ideal trades. So there is no need to quit your job.
The strategies use a 2.5% to 4% stop-loss so each trade is much lower risk than with options and penny stocks where its difficult to manage your risk. Managing risk is the #1 priority when trading.
Do I Need an Expensive Trading Platform, Software and Follow-on Services?
All you need is a smart phone, an internet connection and a little bit of money to fund an account. The screeners taught in the course are free. Also, commissions are free with the suggested online brokers which also have a free simulator which you should start with as with any new strategy.
So you do not need to pay thousands per year for a complicated trading platform, follow-on services, chatroom, and expensive sketchy overseas brokers. We can save your time by dishing out great swing trading opportunities to you but its not necessary if you want to do it all yourself.
There are plenty of chatrooms all over online covering topics that are much more interesting if you want a chat room. And a lot of them are free.
How Much Time Will it Take to Learn the Strategies?
You can go through the course modules in just a few hours. Then you are ready to start on a simulator and review the technical and fundamental rules with each trade. You want to have them down cold. Because they could change your life in a dramatic way.
Once you know the rules inside and out, and are comfortable, you are ready to start with a small account.
The course explains why starting smaller is actually better for rapid account growth.
How Much Time Will it Take to Use the Strategies Each Week?
This is not a 15 minute per week strategy like the 3 Stocks to Wealth service. This is a technical, short-term swing trading strategy that also looks at important fundamental factors.
These strategies have the potential to generate off the charts account growth over the next year. So it will take more time to trade per week which just makes sense with this kind of potential.
The screens should take about an hour once you do them a few times and should be done 1 to 5 times per week. Any time after 4pm Est during the week. Any time over the weekend.
The actual trades are real straightforward. You check a few things before entering a market order. Right afterwards, you enter your stop and limit order. This can take literally seconds with each trade once you do it enough on a simulator.
How Much Money do I Need to Start?
The best amount to start with is $0. Meaning, you always start on a simulator until you understand any new strategy inside and out.
Commissions are now $0 with a lot of online brokers. One of the online brokers we recommend has a $0 minimum account size, free commissions on stock trades, and a simulator. A smaller account just means more trades to reach your long-term goals.
If you can get your average to 5% account growth per trade (averaging wins and losses), its possible to double your account every 15 trades when adding all the profits into your next trade with no margin or options. Doubling your account 6 times takes your account from $3,000 to over $100,000.
You can use a compound interest calculator to figure out how many trades it will take to reach your goals depending on what your average profit per trade is and how many trades you execute over the months.
But one of the keys taught in the course is to start smaller than you otherwise would to have a smaller defined total risk to begin with. Your trading capital should also be separated from your other capital to reduce risk further.
Do You Need Live Trading Demonstrations During the Day to Become a Better Trader?
One of the keys to success in trading is to ignore a lot of the micropatterns during the day. Its not a great lifestyle to get caught up in a micro head-and-shoulders pattern on a 1 minute chart, a test of a VWAP and then another false breakout or breakdown on these shorter time-frames.
And its pretty boring to stare at level 2 and time and sales data all day long looking for some kind of key inflection point. Believe me, I have tried that and wasted a lot of time. You do not need to worry about intraday patterns that are not as profitable than the strategies I am about to teach you.
The daily and weekly charts matter a lot more. Its very easy to to miss out on the bigger swing trades by focusing on micro-patterns and level 2 during the day.
We have example trades covered in the course to make everything crystal clear but its all about identifying the very best swing trading opportunities with the most upside potential with a great set of specific rules to produce a very high win rate while using a tight 2.5% to 4% stop-loss when going after rapid account growth.
So the game is won or lost in the up-front preparation and research to come up with an ideal set of fundamental and technical criteria for a very high win rate trade. Then you just need to do the screens and follow-up checks to find the best opportunities.
We show you exactly how to find the best swing trading opportunities. Once the stock passes all of the criteria and you enter the trade with a market order, the work is mostly over. You just let the trade play out with the stop-loss and limit order.
Are These Opportunities Included in the Daily Alert Service?
We have a few in the daily alert service. However, the service includes a lot of other technical patterns as well.
For rapid account growth, you want to patiently wait for the ideal ones explained in the course. Plus there are many more that come up after the daily alert is published each day.
Is There a Guarantee I Will Not Lose Money?
Yes, some trades will be losing trades. However, these strategies are now our top 2 strategies in our own trading using these highly focused set of rules. This is how much confidence we have in them. Once small caps start to lead the market, it could be a real bonanza.
The top strategy in the course was back-tested both before the pandemic and after the pandemic. Both back-tests produced about an 80% to 87% win rate with nearly twice as much upside as downside. On top of that, this summer we have seen 11 out of 13 winners which is a very high win rate during the summers as experienced traders will tell you.
Some of the stocks that break out out of these top swing trading patterns, with the key fundamental factors taught in the course, go up 20% to 100% or more within a few days as well. So you can make it a no-brainer short-term trade or go for home run trades in many cases as well. The course teaches you each approach.
But the only guaranteed trade that we know of is a money market account paying around 4% per year. Any 100% trading strategy just has not had enough qualifying trades yet. And any strategy that can turn $10 into $1,000 in a day can turn $1,000 into $0 in a day as well.
This is a practical, real approach from someone with over 15 years trading experience. Strategies where you can easily manage your risk at around 4% per trade with a very high win rate. And has the potential to get you to your goals in just a few dozen trades.
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