Contents:
- Key Trading Actions
- Challenges Faced
- What We Did Right
- Lessons Learned
- Looking Ahead
- Final Thoughts
At Micro Stock Trader, we believe in transparency when documenting our trading journey. We share not just our successes but also our setbacks and lessons learned. On January 14, 2025, we faced a highly volatile market session while trading URC, resulting in several stop-loss triggers and challenging conditions. Despite this, we managed to benefit from the session by innovating on our original strategy, demonstrating the importance of adaptability in real-time trading.
URC 5-Minute Chart (January 14, 2025): Visualizing four stop-loss levels triggered during high volatility, highlighting critical price breakdowns.
Here’s a detailed breakdown of our trading activity on January 14 and how we handled the situation:
Key Trading Actions (January 14, 2025)
Stop-Loss Triggers
During the trading session, we encountered four stop-loss levels being triggered at Php 75.85, Php 73.80, Php 71.50, and Php 69.80. This reflects the high volatility and bearish momentum of the market throughout the day.Trading Activity
Initial Sells at Php 72.65:
We sold 340 shares and later 500 shares at Php 72.65, as the price broke below our stop-loss level of Php 73.80. This was a necessary defensive move to minimize further losses as the bearish trend intensified.Re-entry at Php 71.75:
Seeing the price briefly stabilize, we re-entered the market with 500 shares at Php 71.75. However, as the price continued to decline, we exited the position at Php 70.65, adhering to our stop-loss rule at Php 71.50.Final Re-entries Near Php 69.50–Php 69.95:
Toward the end of the session, we made multiple smaller buys near the Php 69.50–Php 69.95 range (a probable bottoming area) as the price showed signs of stabilizing. This move aligned with our counter-trend entry rule, allowing us to position ourselves for a potential rebound while minimizing risk with smaller position sizes.
Challenges Faced
High Volatility and Bearish Momentum
The market remained in a wide state throughout the session, with both the 20-MA and 200-MA on the 5-minute chart showing a clear downtrend. The persistent selling pressure made it difficult to hold long positions without triggering stop-losses.Frequent Stop-Loss Triggers
While our stop-loss strategy helped control downside risk, the frequent triggers resulted in multiple exits and re-entries. This is a known challenge during highly volatile sessions but was necessary to protect our capital.
What We Did Right
Adhering to Stop-Loss Rules
We followed our pre-defined stop-loss levels, exiting positions promptly when key levels were breached. This disciplined approach prevented us from holding onto losing trades for too long, minimizing potential losses.Counter-Trend Re-entries
Despite the bearish sentiment, we identified an opportunity for counter-trend entries near Php 69.50, following multiple gap-downs and high-volume sell-offs. This innovation to our original strategy allowed us to capitalize on a potential rebound while keeping risk low.Smaller Position Sizes for Risk Management
We used smaller position sizes for re-entries near the session’s end. This reduced our overall exposure while still positioning us to benefit from a potential recovery.
Lessons Learned
Adaptability is Key
While we followed our original strategy closely, we also introduced a key innovation by applying counter-trend entries during extreme conditions. This flexibility allowed us to turn a challenging session into an opportunity for innovation to our original strategy, demonstrating the importance of adaptability in real-time trading.Stick to the Plan, But Stay Open to Improvements
By sticking to our modified 10-step trading plan, we managed risk effectively. At the same time, we didn’t hesitate to deviate slightly when the market presented a unique opportunity—this balance of discipline and adaptability was crucial.Transparency Builds Confidence
At Micro Stock Trader, we don’t hide our mistakes or significant deviations from our setup. Instead, we document them openly to improve our process and share valuable lessons with our readers. This session was a perfect example of how even difficult days can provide valuable insights.
Looking Ahead: Strategy for the Remaining Trading Days of Week 3
Given the current bearish trend and market conditions, our strategy for the remaining three trading days is as follows:
Monitor the Php 69.50 Level
This level will be crucial in determining whether the price has found a temporary bottom. If the price holds and shows signs of reversal, we may re-enter with tight stop losses.Wait for a Clear Reversal Signal
We will be looking for a green power bar or a bullish candlestick pattern near support, accompanied by strong volume, before making significant entries.Probability of Breakout
Based on the current consolidation pattern and volume behavior, we maintain a moderate probability (50-60%) of a breakout occurring within Week 3 (January 15 to 21, 2025). If no significant move occurs by the end of the week, we will revise our breakout expectation to Week 4.
Final Thoughts
January 14, 2025, was a tough but insightful trading day. While high volatility and frequent stop-loss triggers posed challenges, our disciplined approach and strategic adaptability helped us manage risk and end the session with the benefit of live testing the Modified 10-Step Trading Plan. This experience underscores the importance of sticking to the plan while staying flexible—a crucial balance in successful trading.
As we move forward, we’ll continue to test and refine our strategy, sharing both our wins and losses transparently. Stay tuned for more updates as we navigate the remaining trading days of Week 3!
Would you like to see how this strategy evolves in real-time? Follow along and join us in this journey!
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.
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