A Great Swing Trading Strategy for Rapid Account Growth

Posted June 28, 2024

After testing dozens of strategies and trading for more than 15 years, there are a couple strategies I would focus on to grow a small account rapidly in todays market. And it has nothing to do with options, penny stocks or any of the latest shiny objects being touted online.

This strategy is favored by many of the most successful traders in history. Traders that grew a small account to a very large account within just a few years time.

The strategy is the high tight flag breakout. Todays blog post explains why its so superior for rapid account growth.

Advantage #1 – It Plays Out Quickly Giving You a Chance for Rapid Compounding

When trying to rapidly build a small account during a bull market, you want to optimize profits per week and month on average while using a tight stop. You especially want to use it when the major indices are trending as they have been for much of this year.

The high tight flag not only had the highest average profit in our back-testing and own trading experience, it also plays out very quickly. The trade usually either hits the tight stop or runs 7% to 20% within 3 days.

The latest back-test run in 2023 showed the average time in the trade when just going for a 7% profit was about 2 days. The average profit, averaging wins and losses, was around 5% with a very high win rate.

This past week we traded both NNE and ENVX coming out of this pattern. The high tight flag course shows you how to find and trade these using our very specific qualification rules you apply before the market opens on the day of the breakout.

Again, trade the average high tight flag breakout as defined elsewhere, and the win rate drops A LOT. (So your optimal position size for rapid account growth will drop a lot also.)

NNE and ENVX met the course rules before the market opened on the day of the breakout this week.

NNE reached the entry point early in the day, held the tight stop and quickly hit the parabolic exit strategy for a big profit for those using the high tight flag course exit strategy. ENVX moved about 15% higher from the entry trigger the same day while holding a very tight stop.

Both of these played out within a couple days and also occurred on different days. So, as one completes, you are back in cash and ready to take advantage of the next one.

This way, you can rapidly compound your gains. AMZN was a great setup featured in the daily alert service but took a few weeks to reach the same target. ELF made a big move for subscribers as well but also took weeks to play out after reaching the entry point.

5% in 2 days beats 9% in a month. We are seeing about 4 high tight flag breakouts that meet the course rules per month currently. More will come up once small caps start to lead and the IPO market re-opens which could be a bonanza later this year or next year.

Advantage #2 – High Tight Flags Rarely Comes up in Bear Markets and Corrections

One of the biggest advantages of high tight flags that meet all of our rules is that they do not come up much in corrections and bear markets.

This is exactly what we want because you want to trade less during bear markets and corrections and more during bull markets.

So we may have only 1 per month during a bear market. And the one per month will be looked at more skeptically as you should when going long during a bear market or correction.

Just by using a strict set of qualification rules and a tight stop-loss, you are automatically managing risk well during a market downtrend. The win rate during a bear market is still OK but you still want to trade less in these market conditions.

One of the most important jobs you have as a trader is to not take the profits made during a bull market and give it back by going long too often during a bear market. Super important.

Advantage #3 – It Has Huge Upside Potential in Many Cases

NNE doubled in price within 3 days this past week out of a high tight flag that met the course rules pre-market. Although it came crashing down soon after, the parabolic exit strategy would have gotten you out with a big profit before the fall.

When you can get a 25% or more profit while using a 4% stop-loss and a very high win rate within 3 trading days, its tough to go wrong during a bull market. NVAX and ASTS also triggered the parabolic exit strategy earlier this month.

So not only do you have quick 7% to 15% gains, some of these will go up 30%, 50%, 100% or more within a couple weeks. This is the technical pattern where it happens much more often once it breaks out. So you can keep a small portion after profit targets are reached for a potential monster move while stopping at your entry point.

If you want to try to compound your account quickly, its better to have a great shot at a 7% profit and also a decent shot at a 25% profit or more within a few days while using a tight stop-loss.

NVDA also recently broke out of a high tight flag that met the course rules pre-market the day of the breakout in May. It surged over 35% but took 3 weeks to get there in this case.

Advantage #4 – It Works Well Even When the Market is Nearing a Peak and Going Into a Correction

Most good traders will look for key divergences, lack of breadth, trend break and other factors in the overall market to know when to take profits and get more cautious.

This is because typical good swing trading setups will often begin to underperform when these factors start to emerge. However, ideal high tight flag breakouts will continue to work well even as the market peaks and heads towards correction levels (10% off the highs for the S&P 500 or Nasdaq).

In our experience, the ideal high tight flag breakouts still work well as the market heads towards correction levels. This cannot be said for most other long strategies taught elsewhere. Again, the typical high tight flag breakout will not do so well at this point in the market cycle.

But the high tight flags that meet our strategy rules the morning before the breakout historically continue to do well. So it will be a go to strategy for us in the weeks ahead even if the market looks like its heading into a correction.

Outside of recent IPOs, it also continues to have a strong win rate as we saw over the past few weeks despite seasonal weakness with most stocks.

Advantage #5 – You May Only Need High Tight Flag Breakouts to Make a Fortune

For those who like to hold trades much longer, the high tight flag breakout can be a great entry point or place to add to a long-term trade.

SMCI broke out of a pattern very similar to a high tight flag in May of last year before it moved 1,100% higher within 10 months. TSLA broke out of an ideal high tight flag pattern in early 2020 before it ran over 700% over the next year. Both stocks were featured in the daily alert service just before the stock took off.

But these types of moves are rare. However, if you average 6% profit per trade with a tiny account and do 120 trades over the next 3 years, you could achieve something few ever do in trading.

You could turn $3,000 into a million dollars. $6,000 into $2 million.

Again, the chart above shows how quickly an account can grow from $3,000 to over a million with compounding at 6% per trade. A 3% account growth per trade average would just take twice as many trades.

This would be a 32,000% return in 200 trades. It easily beats 1,000% by a mile.

The worse thing you can do is focus on lesser quality trades and not cut losses quickly.

A lower win rate with options, penny stocks, meme stocks, or lower priced stocks greatly reduces the optimal position size for account growth. If you have to use a much smaller position size for optimal account growth, why trade more risky penny stocks, meme stocks or options in the first place?

Again, there are certain market conditions where we would not trade this strategy but its a lot more robust than most believe. Trade the lesser quality high tight flags and the win rate drops a lot and should be avoided more often.

High Tight Flag Bonanza Coming?

If small caps start to lead the market, this strategy could go gangbusters with more ideal high tight flags coming up in the months ahead.

The strategy involves quickly growing a small account during market uptrends until the best high tight flags no longer come up on your radar. Then start trading them again once the next market uptrend starts. Trading them over and over until you reach your goals.

In fact, these high tight flags can be easily traded from your smart phone. This is swing trading, not day trading, so you do not have to worry about the pattern day trading rule or risking your standing at work to trade them. You basically just enter the trade, put in your stop right away and then the price alert or limit order for your profit. Real simple.

No expensive data services, pricey trading platform, learning hot keys and staring at your charts all day. This is a lot easier and more effective.

There are also other trading opportunities that come up many times during most quarters. These opportunities are also great for rapidly growing a small account.

In the days ahead, we will have a set of videos explaining this new strategy in detail. This strategy can easily double (or more) the trading opportunities available per year that are great for rapidly growing a small account. Without messing with the increased risk and low win rate of penny stocks, options and lower quality stocks.

The latest videos will also have a complete strategy for growing a small account rapidly covering both strategies. Precise stop-losses, optimal position sizes, key things to keep in mind, a winning daily routine, and more will be covered extensively.

These videos explain a great strategy to potentially change your life during a bull market whenever bull markets occur. All while using a very tight stop-loss with a high win rate strategy to limit risk.

The next bull market is always right around the corner historically. So you want to watch these videos.

Plus the videos will explain in detail the 2 strategies we would use for rapid small account growth that can get you to your goals more quickly without the risks of margin, options and penny stocks.

The new videos will also go over exactly how to screen and find these ideal trading opportunities each week on your own without added services. No data services, charting services or other extra expenses to worry about. No need to worry about the PDT rule either.

Be sure to check your inbox for this latest video series.

The Biggest Mistakes Holding You Back from Growing a Small Account Quickly

How to Grow a Small Account Quickly in 2024 – Part 1

Our Top 2 Swing Trading Opportunities for the Weeks Ahead