Micro Stock Trader: Budget Ethical Trading Account

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Wednesday, February 5, 2025

Summary of the Chronological Evolution of Our Hybrid 10-Step Trading Strategy (January 16, 2025 – February 2025)

Since January 16, 2025, our Hybrid 10-Step Trading Strategy has undergone significant refinements based on live testing through our Budget Ethical Trading Account (BETA). Initially, we focused on single-stock execution using daily charts, but as our understanding deepened, we expanded the approach to multiple stocks and incorporated monthly charts for broader trend confirmation.

Chart depicting the evolution of the Hybrid 10-Step Trading Strategy with key trading adjustments and portfolio refinements

Evolution of Our Hybrid 10-Step Trading Strategy – Key Refinements and Live Trading Insights

Phase 1: Initial Testing of the Strategy (January 16 – January 21, 2025)

We started with URC as the primary test stock, refining entry and exit strategies using our Modified 10-Step Trading Plan.
Trading frequency was limited to one entry and exit per week, avoiding overtrading and excessive transaction costs.
Entries were strictly based on daily charts, with stop-loss discipline introduced early.
Tactical entries were balanced against core positions to enhance execution and minimize risk.

Phase 2: Expanding to Multiple Stocks (January 21 – February 2025)

January 21, 2025: Completed Phase 1, after exiting URC due to price weakness, highlighting the importance of disciplined execution.
January 23, 2025: Began testing multiple stocks (URC, MONDE, ALLHC, DDMPR, and RCR) while applying the Hybrid 10-Step Trading Strategy for trade evaluations.
January 24, 2025: Conducted our first trade evaluation (URC – Trade No. 3), reinforcing the importance of volume confirmation and trade rating assessments.
January 31, 2025: Implemented a BETA Portfolio Rebalancing to refine position sizing and sector diversification.

Major Refinements to the Hybrid 10-Step Trading Strategy

As our live testing evolved, we made key adjustments that prepared us for the portfolio-wide rebalancing on January 31, 2025:

Shift from Single-Stock Testing to Portfolio-Wide Application
- Initially, we tested the strategy on URC alone but later expanded to 11 stocks, requiring a new way of assessing trade performance.
- New Rule: Live testing must now include at least 20 trades per stock rather than 20 trades overall.
Integration of Monthly Charts for Long-Term Trend Confirmation
- While the daily chart remains useful for tactical adjustments, we realized that monthly charts provide a more reliable trend context.
- New Rule: Monthly charts are now our primary timeframe, while daily charts are used for monitoring daily volume trends and short-term setups.
Emphasis on Dynamic Stop-Loss Adjustments
- Early on, we found that rigid stop-losses were too restrictive, leading to premature exits.
- New Rule: Implement a hybrid approach with hard stop-losses for deep protection and dynamic stop-losses for trade flexibility.
Stronger Trade Evaluation Metrics & Risk-Reward Adjustments
- By January 24, 2025, we introduced trade rating scores (6.6–8.8 out of 10) to assess entry logic, risk management, and trade execution.
- New Rule: Trades must have a minimum 7/10 rating before execution to ensure quality setups.
Portfolio-Wide Adjustments & Tactical Rebalancing (January 31, 2025)
- The market's high volatility necessitated reallocating capital across multiple stocks to reduce single-stock exposure.
- New Rule: Implemented BETA Portfolio Rebalancing to increase diversification and avoid concentration risk.

How These Refinements Prepared Us for the January 31, 2025 Portfolio Rebalancing

Our gradual refinement of the Hybrid 10-Step Trading Strategy ensured that we were well-positioned to handle the market conditions leading up to January 31, 2025:

Portfolio Expansion Decision
- Our realization that 20 trades were insufficient for a true strategy evaluation led us to extend testing to 20 trades per stock.
- This allowed us to apply the strategy across different market conditions and stock types, avoiding a biased assessment.
Risk Control & Dynamic Trade Adjustments
- The introduction of dynamic stop-losses and volume confirmation helped us exit positions at the right time, minimizing losses.
- The new rule of waiting for volume-backed breakouts saved us from premature entries.
Emphasis on Higher-Quality Trade Setups
- The 7/10 trade rating threshold ensured that we only executed high-probability trades, reducing unnecessary risks.
- This forced us to maintain discipline, even when multiple stocks showed potential but lacked sufficient confirmation.
Strategic Portfolio Rebalancing
- By January 31, 2025, we had a clearer understanding of which stocks aligned best with our trading approach.
- This led to rebalancing our BETA portfolio, ensuring that we had the right mix of core holdings and tactical trades.

Recommendations for February 2025

With our Hybrid 10-Step Trading Strategy now optimized for live market conditions, our next steps focus on further refinement and disciplined execution:

1. Execute the 20-Trade Per Stock Rule

Our testing must now be expanded to at least 20 trades per stock, ensuring a comprehensive evaluation.
This will allow us to compare performance across different stocks and market conditions.

2. Strengthen Monthly Chart Implementation

While the daily chart remains important, our primary trading decisions will now be based on monthly charts.
This will filter out short-term noise and focus on broader trend movements.

3. Enhance Volume Analysis for Entry & Exit Decisions

No trade should be executed without volume confirmation supporting the setup.
Institutional selling pressure must be considered before entering any trade.
New Rule: We shall only enter breakouts with above-average volume, ensuring institutional support.

4. Maintain Disciplined Execution & Trade Rating System

We must continue using the 7/10 trade rating system to ensure that only high-quality trades are executed.
No deviation from the strategy is allowed—absolute discipline is required.

5. Adapt to Market Conditions & Adjust Position Sizing

Given the volatility observed in January 2025, February’s market conditions must dictate position sizes.
New Rule: Core positions should remain steady, but tactical entries should be adjusted based on risk-reward ratios.

Conclusion

With the lessons learned from January 2025, we are entering February 2025 with a fully refined version of our Hybrid 10-Step Trading Strategy. The decision to expand testing to 20 trades per stock, focus on monthly charts, and strictly enforce volume-backed breakouts ensures that we execute our trades with absolute discipline.

Our next goal is to execute a minimum of 20 trades per stock with full adherence to the strategy. After completing this expanded live testing, we will conduct a final performance review to determine the overall effectiveness of the Hybrid 10-Step Trading Strategy.

🚀 February 2025 marks the next evolution of our trading journey. The strategy is set—now, it’s all about disciplined execution. 🚀

Disclaimer: This post is for informational purposes only and should not be considered financial advice. Always do your own research before making any trading decisions.

Wednesday, January 15, 2025

Introducing BETA: Budget Ethical Trading Account for Live Strategy Testing

As part of our ongoing refinement of the Modified 10-Step Trading Plan, we have launched the Budget Ethical Trading Account (BETA). This account is dedicated to live-testing our trading strategies with a smaller, focused position. For the time being, we will set aside our primary account holding 1,500 shares of URC and shift our focus entirely to BETA, which starts with a manageable 210 shares of URC.

The purpose of BETA is to concentrate on the active trading aspect of our strategy while keeping our risk exposure minimal. With this account, we aim to continue exploring small position sizes, tactical entries, and core positions in a real-world trading environment.

Micro Stock Trader Budget Ethical Trading Account (BETA).

Adjustments to Our Strategy for BETA

Given that BETA starts with 210 shares of URC, we have made the following adjustments to our position sizing and risk management strategy:

1. Position Sizing for BETA

Since the total number of shares in BETA is 210, we will scale our tactical and core positions accordingly:

Core Positions: 50% of trading shares → 100 shares
Core positions in BETA represent half of the total account and are used for medium-term trades when we have high confidence in a setup.
Tactical Entries: 10% of trading shares → 20 shares
Tactical entries are smaller, speculative trades used to test the market during uncertain periods or near potential reversal levels.

This scaling ensures that we maintain the same proportionate approach as in our main account, but with a smaller capital base.

Updated Trading Scenarios for BETA

Scenario 1: Testing Key Support Levels

If URC approaches a key support level, such as Php 70.50, we can:

Start with a tactical entry of 20 shares to test the market.
If the price holds and shows signs of upward momentum, we can add a core position of 100 shares, increasing our exposure as confidence in the setup grows.

Scenario 2: Profit-Taking at Resistance Levels

If URC reaches a significant resistance level, such as Php 73.50, we will:

Take partial profits by selling 50 shares, ensuring that we lock in gains while leaving some shares to ride further upside if momentum continues.
Use a trailing stop-loss for the remaining shares to protect profits while staying engaged in the trade.

Scenario 3: Stop-Loss Strategy

We will maintain a hard stop-loss at Php 67.75, similar to our primary account, to limit downside risk. If the price breaks below this level:

We will exit the entire position to preserve capital.
Tactical re-entry will only be considered if the price stabilizes and forms a new support level.

Why BETA Matters

BETA serves as a controlled environment where we can test real-time applications of our trading strategy with lower risk. This approach allows us to:

Focus on Execution:
With a smaller position, we can concentrate on fine-tuning our entry and exit strategies without the emotional burden of managing a large position.
Improve Tactical Decision-Making:
BETA helps us refine tactical entries and exits, especially during high-volatility sessions, ensuring that our strategy remains adaptable to different market conditions.
Document and Learn:
Every trade in BETA will be documented meticulously, allowing us to gather insights and lessons that can be applied to our primary account once the testing phase concludes.

Key Takeaways for BETA

Position sizing has been adjusted to fit the smaller scale of BETA, with 100 shares for core positions and 20 shares for tactical entries.
The hard stop-loss at Php 67.75 remains a critical part of our risk management strategy.
BETA allows us to stay committed to disciplined execution while reducing risk exposure.

Final Thought

By launching BETA, we reinforce our commitment to refining the Modified 10-Step Trading Plan through disciplined, real-world testing. This focused approach ensures that we continue learning and improving while keeping risk under control.

Stay tuned as we document our progress with BETA, sharing key trades, lessons learned, and further adjustments to our strategy!

Would you like to follow our BETA journey? Keep checking in for our latest updates as we put theory into practice!