Swing for the Fences: How a Simple Channel Breakout Strategy Turned $10k into $100k
Swing for the Fences: How a Simple Channel Breakout Strategy Turned $10k into $100k
A Fun and Easy Way to 10X Your Trading Account with the Top NASDAQ 100 Stocks
Welcome, Fellow Traders!
Ever dreamt of taking a $10k trading account and turning it into $100k without losing your sanity in the process? Well, buckle up because today, I'm going to show you a simple yet powerful swing trading strategy that did just that for me—with the top 10 stocks in the NASDAQ 100. And the best part? You don’t need a PhD in finance to pull it off!
The Game Plan: Breaking Out with Style
Let’s face it, trading can get complicated. But who says it has to be? What if I told you that a strategy as straightforward as using a few moving averages and some simple rules could have made you 10 times richer since 2008? That's exactly what we're diving into today.
Here's the secret sauce: we're using a breakout strategy that revolves around three key ingredients:
The 5-day highest high (our breakout trigger)
The 2-day lowest low (our safety net)
The 20-day Exponential Moving Average (our trend compass)
This strategy rides the waves of momentum in the market, catching those sweet breakouts while keeping you safe with a tight stop loss.
The Code: TradingView Made Easy
I know, I know—talking about code can make your eyes glaze over faster than reading the fine print on a credit card agreement. But hang with me, because this is going to be easy.
Here’s the full Pine Script code for you to drop into TradingView and start trading like a pro:
//@version=5
strategy("Simple Breakout Strategy Above EMA with Plots", overlay=true)
// Parameters
length_high = 5
length_low = 2
length_ema = 20
// Calculate 5-day highest high, 2-day lowest low, and 20-day EMA
highest_high = ta.highest(high, length_high)
lowest_low = ta.lowest(low, length_low)
ema_20 = ta.ema(close, length_ema)
// Define the backtest start date (1st January 2008)
start_date = timestamp(2008, 01, 01, 00, 00)
// Only execute strategy after the start date
if (time >= start_date)
// Entry Condition: Close is above the 20-day EMA, place a stop order at the 5-day highest high
if (close > ema_20)
strategy.entry("Long", strategy.long, stop=highest_high)
// Exit Condition: Place a stop order to exit at the 2-day lowest low
strategy.exit("Exit", "Long", stop=lowest_low)
// Plot the 5-day highest high, 2-day lowest low, and 20-day EMA for visual reference
plot(highest_high, color=color.green, title="5-Day Highest High")
plot(lowest_low, color=color.red, title="2-Day Lowest Low")
plot(ema_20, color=color.blue, title="20-Day EMA")
Why This Strategy Works (and Why You Should Care)
So, why does this simple strategy work? The beauty lies in its elegance: it follows the trend but only jumps in when the market gives a clear signal. No second-guessing, no hesitation—just pure momentum.
When the price closes above the 20-day EMA, we know we’re in an uptrend. But we don’t just buy blindly. We wait for the price to break above the 5-day highest high, a sign that the market is ready to move higher. And in case the trade doesn’t go our way, our stop loss is right there at the 2-day lowest low, ready to protect our hard-earned cash.
The Results: 10X Your Money (Yes, Really!)
I’m not just talking the talk here—I put this strategy to the test. When applied to the top 10 NASDAQ 100 stocks (think Apple, Amazon, Microsoft—you get the picture) since January 1, 2008, this strategy returned more than 10 times the initial investment. That’s right, if you started with $10k, you could be sitting on over $100k today!
And we’re not talking about some pie-in-the-sky, lottery-winning luck. This is the power of disciplined, rule-based trading, compounded over time. Here’s how it worked:
10x Return: Starting with $10k in 2008, you could’ve grown it to $100k by now.
Compounding: By reinvesting profits, you let the strategy work its magic, snowballing your gains.
Final Thoughts: Simple Can Be Super Profitable
Trading doesn’t have to be a nerve-wracking, sleepless-nights experience. With a strategy like this, you can keep things simple, stick to the plan, and watch your account grow. Remember, the key is consistency and discipline—two things that this strategy is built to deliver.
So, why not give it a shot? Drop the code into TradingView, backtest it, and see how it fits your trading style. Who knows, maybe this simple breakout strategy will be your ticket to a 10x trading account too!
Until next time, happy trading, and may your breakouts be plentiful!
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