Sunday, January 19, 2025

Comparing the Modified 10-Step Trading Strategy vs. Retracement Trading Strategy

As we refine our live trading approach under the Budget Ethical Trading Account (BETA), we are evaluating two distinct methods: the Modified 10-Step Trading Strategy and the Retracement Trading Strategy. Each approach offers unique insights into market behavior, risk management, and execution style. This post compares both models, highlighting their strengths, weaknesses, and potential applications.

A market chart illustrating key support and resistance levels, stop-loss placements, and tactical trading decisions under the Modified 10-Step Trading Strategy.

Modified 10-Step Trading Strategy: Key Support, Resistance, and Risk Management in Action

A stock chart displaying retracement zones at different percentage levels, highlighting trend reversal and continuation points.

Retracement Trading Strategy: Using Key Levels to Identify Trend Continuation & Reversal

1️⃣ Modified 10-Step Trading Strategy Scenario

🔹 Primary Focus: Tactical trading based on key support and resistance levels with strict stop-loss placement.

🔹 Entry Strategy:

67.00 as Key Support Level – Entry only if confirmed by a Green Elephant Bar with increasing volume.
71.50 as Hard Resistance – Immediate exit on approach unless volume supports a breakout.
65.50 as Hard Stop-Loss – Exit entirely if price falls below this level to prevent further drawdowns.
60.00 as Bargain Re-Entry Zone – Potential entry if price reaches this level and shows reversal confirmation.

🔹 Risk Management:

Volume confirmation required before any entry.
Stop-loss placement prioritizes capital preservation.
Focus on real-time decision-making based on price action.

🔹 Main Objective: Capital protection and execution discipline, ensuring the strategy adapts dynamically to real-time market conditions.

📌 Full Analysis: Modified 10-Step Trading Strategy Scenario

The Modified 10-Step Trading Plan: Enhancing Risk Management and Flexibility

2️⃣ Retracement Trading Strategy

🔹 Primary Focus: Retracement-based entry and exit levels using percentage-based zones to predict trend continuation or reversals.

🔹 Entry Strategy:

100% Retracement at 104.4 – Origin of power move (October 1, 2024).
75% Retracement at 95 & 55% Retracement at 88 – Trend Reversal Zones where price is likely to reject and reverse.
45% Retracement at 84 & 25% Retracement at 77 – Trend Continuation Zones, indicating where price could resume the downtrend.
0% Retracement at 68 – Current bottom of the power move, which is a potential reversal point.

🔹 Risk Management:

Focus on retracement levels rather than hard stop-loss points.
Entries and exits are predefined based on historical power moves.
No immediate reliance on real-time volume confirmation for execution.

🔹 Main Objective: Strategic swing trading using price retracements to identify optimal trend continuation or reversal zones.

📌 Full Analysis: Retracement Trading Strategy

Micro Stock Trader’s Adopted Retracement Trading Strategy

Key Differences Between the Two Approaches

Aspect	Modified 10-Step Trading Strategy	Retracement Trading Strategy
Trading Approach	Tactical, real-time trading decisions	Predefined retracement zones
Entry Criteria	Based on support/resistance levels & volume confirmation	Based on retracement percentages from prior moves
Risk Management	Hard stop-loss at 65.50, bargain entry at 60.00	No predefined stop-loss, relies on retracement zones
Focus	Active position management & dynamic adjustments	Swing trading with predefined reversal/continuation points
Main Strength	Adaptable to real-time market movement	Systematic approach using Fibonacci-style retracements

Conclusion: Which Strategy Is More Effective?

The Modified 10-Step Trading Strategy is ideal for traders who prefer active trading, risk management, and real-time execution adjustments.
The Retracement Trading Strategy is suitable for traders focusing on swing trading, predefined retracement-based entries, and trend-following.
Combining elements of both strategies can provide a more well-rounded trading approach, using retracement zones as guides while executing based on the Modified 10-Step strategy’s real-time risk management.

📌 Which strategy do you prefer? Follow our live updates as we test both approaches in the BETA Trading Account! 🚀

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.

At Micro Stock Trader, we continuously refine our trading strategies to align with sound, proven methodologies. One approach we are incorporating into our toolkit is Oliver Velez’s Retracement Trading Strategy, as outlined in his YouTube presentation, "How To Trade Key Retracement Without Indicators" (Watch here).

Stock chart of Universal Robina Corporation (URC) displaying retracement levels, trend continuation zones, and trend reversal zones based on the Retracement Trading Strategy. Key price levels at 68, 77, 80, 84, 92, and 104.4 are marked.

Week 4 analysis of Universal Robina Corporation (URC) using the Retracement Trading Strategy, highlighting key trend reversal and trend continuation zones. The stock is currently testing the 0% retracement level at 68, a critical point for potential rebound or further downside continuation.

Understanding Retracement in Trading

A market move that shows a strong burst of momentum often undergoes a natural retracement before resuming its trend. The key to retracement trading is understanding when a pullback presents a viable trading opportunity versus when it signals potential trouble.

According to Oliver Velez, there are two types of strength moves in the market:

Single-bar strength move: A single large power bar showing aggressive movement in price.
Multiple-bar period of strength: A sustained upward or downward trend over several bars.

Both types of moves create key levels that define retracement zones, which traders can use to make informed decisions.

The Key Levels of Retracement Trading

When a stock experiences a significant strength move, it establishes two critical levels:

Top of Strength Move: This is the peak of the power move, marking the 0% retracement level.
Origin of Strength Move: This is where the power move began, marking the 100% retracement level.

The retracement occurs when the price pulls back from the peak of the move. The probability of a rebound to the original strength level depends on how deep the retracement goes. The breakdown of probabilities is as follows:

Retracement to 33% (1/3 of the move):
- 80% probability of rebounding back to the top of the strength move.
- Considered a high-probability trade setup.
Retracement to 50%-66% (midpoint to 2/3 of the move):
- 50% probability of rebounding back to the top.
- The risk increases as price moves deeper into the retracement zone.
Full retracement (back to origin or 100% retracement):
- 10% probability of rebounding back to the top.
- A full retracement indicates potential trend failure.

Equivalent Discussion for a Downtrend Power Move

In the case of a downtrend or downward power move, the retracement process works in reverse. The price experiences a strong decline, and a counter-trend rally or pullback occurs before potentially resuming the downward trend. The probability of resuming the downtrend depends on the retracement depth:

Retracement to 33% (1/3 of the move):
- 80% probability of price resuming its downward move to the prior low.
- Considered a high-probability continuation trade setup.
Retracement to 50%-66% (midpoint to 2/3 of the move):
- 50% probability of price resuming its downward move.
- Increased risk as price moves deeper into the retracement zone, signaling potential trend hesitation.
Full retracement (back to origin or 100% retracement):
- 10% probability of price resuming the downward move.
- A full retracement suggests potential trend reversal or trend failure.

The Sweet Spot for Trading Retracements

The most favorable area for high-probability trades lies in the 25%-45% retracement range. This zone offers 60% to 90% win probabilities, making it the optimal entry area for a retracement trade.

By waiting for a pullback into this sweet spot zone, traders increase their chances of capturing a continuation move back to the highs (in an uptrend) or back to the lows (in a downtrend), while avoiding trades that may result in trend reversals.

Practical Application

Identify a Strong Move: Look for either a single-bar power move or a multi-bar strength move.
Mark Key Levels: Identify the top of the move (0%) and the origin (100%).
Monitor Retracement Levels: Wait for a pullback into the 25%-45% retracement range.
Execute Trades with Confirmation: Use price action signals or volume confirmation before entering a trade.
Set Targets and Stop Losses: Aim for a return to the top (in an uptrend) or to the prior low (in a downtrend) while managing risk accordingly.

Tactical Entry Assessment for URC at 68 Level (Week 4)

Scenario Analysis

Micro Stock Trader is considering a tactical entry at 68 level for 90 URC shares in Week 4. Given the recent downward power move from an origin of 104.40 (October 1, 2024) to a low of 67.80 (January 17, 2024), the retracement strategy suggests that URC is at a critical level where a potential trend reversal may occur.

Rationale for Entering at 68 Using a Stop Limit Order

The rationale for entering at 68 for 90 URC shares is to live test the Stop Limit Order by DragonFi. A Stop Limit Order is a type of order designed to help traders buy breakouts, limit losses, or take profits.

To place a Stop Limit Order, two prices must be specified:

Stop Price: The price at which the order becomes executable. We are setting our Stop Price at 67.80.
Limit Price: The highest price we are willing to pay (if buying) or the lowest price we are willing to accept (if selling). We are setting our Buy Limit Price at 68.

This means our order will only be executed at a price that is at or below the Limit Price of 68, ensuring that we won’t pay more than 68 for the stock. This strategy allows for controlled entry into the trade while minimizing slippage.

Strengths of Entering at 68 Level

Deep retracement suggests discounted entry: A price near the lowest level of the move provides an opportunity for maximum upside potential if a reversal occurs.
Potential breakout from oversold levels: If buying momentum builds up, it could trigger a move towards the trend reversal sweet spot (88.00 - 95.00 range).
Clear stop-loss placement: Entry at 68 allows traders to define a tight stop-loss just below 67.80, minimizing downside risk.

Weaknesses and Risks

Potential continuation of downtrend: The stock may still be in a bearish phase, and a break below 67.80 could signal further downside.
Limited confirmation of trend reversal: The stock has not yet reached the 55%-75% retracement levels where reversals typically gain momentum.
Low probability of immediate rally: At 68, the probability of an immediate move back to 104.40 is low, given that it has yet to break key resistance levels.

Probabilities Based on Strategy

If URC rebounds into the sweet spot (88.00 - 95.00): 60%-90% probability of trend reversal.
If URC fails to reclaim above 75% retracement level (95.30): Potential fake breakout leading to another downtrend leg.
If URC breaks below 67.80: High risk of continued sell-off and new lower low formation.

Overall Assessment

A tactical entry at 68 for 100 URC shares presents a high-risk, high-reward scenario. Given that this level represents an extreme retracement, a trend reversal strategy should be confirmed by price action signals (e.g., bullish engulfing, high buying volume). The safest approach would be:

Partial entry at 68, monitoring price reaction.
Adding more positions near 75% retracement (95.30) if the trend reversal gains traction.
Strict stop-loss below 67.80 to prevent deep losses.

Conclusion

While the retracement trading strategy provides valuable insights, it is crucial to wait for confirmation before committing fully to a reversal trade. A tactical entry at 68 could yield significant rewards if the stock rallies into the trend reversal zone, but risk management is key to prevent substantial losses in case of further declines.

Retracement trading is a powerful tool when used correctly. By focusing on the 25%-45% retracement zone, traders can maximize their win rates while minimizing risks. At Micro Stock Trader, we believe this method provides an effective framework for identifying high-probability trading opportunities without relying on additional indicators.

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.

As we move into Week 4 of live testing under the Budget Ethical Trading Account (BETA), our primary focus will be enhancing downside scenario modeling and incorporating volume confirmation for support and resistance levels. Week 3 highlighted critical areas where our trading strategy needed refinement, particularly in identifying weaker support levels and anticipating breakdowns more effectively. This post outlines key adjustments for Week 4 to improve execution and risk management.

A technical analysis chart for URC in Week 4, highlighting key resistance at 71.50, support at 67.00, stop-loss at 65.50, and a bargain price entry at 60.00, with volume analysis to confirm trade decisions.

Week 4 BETA Trading Scenario for URC: Key Support, Resistance, and Risk Management Strategy

1. Strengthening Downside Scenario Modeling

Lessons from Week 3:

Our expectation of 77.07 as a strong support level did not hold, leading to a significant price breakdown.
We lacked a structured downside contingency plan, resulting in an overly optimistic market expectation.
Stop-loss placement worked as intended but could be further optimized to allow tactical re-entries.

Week 4 Adjustments:

✔ Model Multiple Downside Scenarios – Instead of relying on a single support level, we will create a tiered downside risk model based on past price action, volume shifts, and market sentiment.

✔ Define Alternative Support Zones – A structured approach will identify probable support levels at 67.00 (weak support), 65.50 (hard stop), and 60.00 (bargain entry).

✔ Tactical Stop-Loss Adjustments – Stops will be refined to protect capital while allowing flexibility for tactical re-entries if strong reversal signals appear.

Simulated Downside Scenarios & Tiered Support Modeling

We will now analyze three potential bearish scenarios to test our model’s response under different market conditions.

🔻 Scenario 1: Gradual Sell-Off & Controlled Decline

URC price slowly declines toward 67.00 with low-to-moderate selling volume.
At 67.00, if volume remains weak, we assume that the support level will not hold.
Price continues drifting downward, hitting 65.50, triggering our hard stop-loss.
If selling pressure persists, URC approaches 60.00, where we reassess for a re-entry opportunity.

Trade Action:

❌ No entry at 67.00 without volume confirmation.

🚨 Exit at 65.50 if downtrend continues.

✅ Consider tactical re-entry at 60.00 only if reversal patterns emerge.

🔻 Scenario 2: High-Volume Breakdown Below 67.00

Price reaches 67.00 but with high selling volume, confirming further downside pressure.
URC sharply declines to 65.50, showing no signs of reversal.
Further institutional selling drives the price toward 60.00 within a short period.
Support at 60.00 is tested, and volume increases significantly, signaling potential stabilization.

Trade Action:

❌ No entry at 67.00 due to strong bearish momentum.

🚨 Wait for volume stability at 60.00 before considering an entry.

✅ Look for a reversal candle (Green Elephant Bar) before re-entering.

🔻 Scenario 3: False Breakdown & Rapid Reversal

URC breaches 67.00 momentarily, triggering stop-losses from weak hands.
Suddenly, institutional buyers enter, reversing the price back above 67.00 with a strong green candle.
Buying volume spikes, and price recovers toward 71.50, testing resistance.
The stock consolidates between 67.00-71.50, forming a bullish structure.

Trade Action:

✅ Enter at 67.00 if strong buying volume appears.

✅ Hold position if recovery momentum continues.

🚨 Exit at 71.50 unless a confirmed breakout is supported by volume.

2. Incorporating Volume Confirmation for Support & Resistance

Lessons from Week 3:

Key support levels failed because volume did not confirm buyer strength.
High selling volume on January 14-16 reinforced the need for caution in calling support levels.
Resistance levels lacked momentum confirmation, making breakouts less likely.

Week 4 Adjustments:

✔ Confirm Support & Resistance with Volume Trends – Any support level must be validated by higher-than-average buying volume. If price reaches support but volume remains low, we will delay entries to avoid premature positioning.

✔ Monitor Institutional Selling Pressure – Large-volume sell-offs indicate stronger bearish control. If institutions continue offloading shares at high volume, we will adjust our trading expectations accordingly.

✔ Use Volume to Confirm Breakouts – Instead of assuming resistance levels will break, we will wait for volume-backed moves above resistance before committing to breakout trades.

3. Tactical Adjustments to Trading Strategy

Key Level	Week 3 Expectation	Week 4 Assumptions and Revised Strategy
77.07	Expected strong support	Removed as a key level; now an invalidated support
71.50	Resistance level	Hard Resistance. Exit immediately on approach unless volume confirms strength.
67.00	Expected to hold	Weak Support. Entry only if confirmed by Green Elephant Bar + volume increase
65.50	Not previously considered	Hard Stop-Loss. New hard stop-loss to prevent deeper drawdowns. If price falls below this level, we exit entirely to limit losses.
60.00	Not previously considered	Bargain Re-Entry. Strategic re-entry zone for bargain hunting. If the market experiences a deeper sell-off, this level may offer an ideal entry.

Final Takeaways for Week 4

✅ Downside scenarios will be fully modeled, including tiered support levels.

✅ Volume confirmation will be required for any support/resistance validation.

✅ Stop-losses will be strategically adjusted for better tactical positioning.

✅ Breakout expectations will be managed conservatively with volume analysis.

By implementing these refinements, we aim to make more data-driven trading decisions while reducing exposure to unnecessary risks. Week 4 will serve as a key test of our ability to adapt to changing market conditions effectively.

📢 Stay tuned for next week's trading recap and insights as we put these refinements into practice!

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.

Saturday, January 18, 2025

Week 3 Scenario Modeling Assessment for URC: Refining Our Predictive Skills

As we assess our scenario modeling performance for Week 3, it is important to evaluate how our projections aligned with actual market outcomes. By comparing our Week 3 Scenario Chart with the Week 3 Closing Chart, we can refine our predictive strategies and improve our execution in future weeks.

A technical analysis chart illustrating the Week 3 scenario model for URC, marking key support, resistance levels, and expected price movement.

Week 3 Scenario Model for URC: Projected Support, Resistance, and Market Movement Analysis

Universal Robina Corporation’s (URC) daily candlestick chart at the close of Week 3 on January 18, 2025, showing key price levels and trend analysis.

URC Daily Chart at Week 3 Close: Evaluating Market Movement as of January 18, 2025

1. Comparing Our Week 3 Model vs. Actual Price Action

🔹 Expected Scenario (Week 3 Model)

Probable Resistance: 80.70
Probable Support: 77.07
Target Breakout Zone: 85.00 (1/3 Zone)
Stop-Loss Adjustment: 73.80

Key Assumptions in Our Model:

✅ We expected URC to consolidate around the 77.07 support level before attempting a move toward 80.70.

✅ We projected that, if momentum built up, a potential breakout towards 85.00 could occur.

✅ Our updated stop-loss of 73.80 was positioned to protect against downside risks while allowing price action to develop.

🔹 Actual Market Movement (Week 3 Closing Chart)

Closing Price: 68.60

Support Failed: Price dropped significantly below 77.07 and even the stop-loss at 73.80.

Bearish Momentum: URC fell sharply, breaching multiple support levels with increased volume.

Moving Averages: The 20-day MA (76.37) failed to provide support, confirming further bearish sentiment.

Key Observations from the Actual Price Action:

🔻 The expected support level at 77.07 did not hold—instead, a strong breakdown occurred.

🔻 Stop-loss positioning (73.80) was breached, confirming the importance of having a rigid risk-management system.

🔻 Bearish volume surged, indicating strong selling pressure rather than a recovery attempt.

2. What We Did Well in Week 3 Scenario Modeling

✅ Incorporated Stop-Loss Adjustments: Our dynamic stop-loss strategy at 73.80 was a good move, as it prevented excessive drawdowns.

✅ Plotted Probable Resistance & Support Correctly: While price did not respect support, the levels were based on valid historical price action.

✅ Anticipated Key Market Zones: Our 1/3, 2/3, and 3/3 breakout zones correctly outlined potential bullish scenarios, even though the market ultimately moved in the opposite direction.

Mid-Day Trading Reflection: January 16, 2025 – Lessons from the Tactical Action

Transaction Costs and Tactical Adjustments – Refining Our Trading Plan

3. Where We Can Improve Moving Forward

🔸 1. More Focus on Downside Scenario Modeling

🔹 Our scenario focused heavily on a potential breakout but did not fully model a downside continuation scenario in the event of a breakdown.

🔹 Moving forward, we should build alternative scenarios that consider:

A breakdown below key support levels (like what happened this week).
Adjusting stop-losses dynamically based on trend weakness.
Identifying lower probability, high-impact events (like a major support breach).

🔸 2. Incorporate Stronger Volume & Trend Analysis

🔹 The Week 3 Closing Chart showed a strong increase in selling volume, signaling high conviction from sellers.

🔹 Our future models should incorporate volume analysis to confirm or invalidate price setups.

🔹 If volume is declining while price is testing support, it may be a better indicator that the level is weak, helping us adjust our trade plan.

🔸 3. Refine Tactical Entry & Exit Decisions

🔹 Given the level of volatility, we should explore smaller tactical entries first instead of assuming a full position at a key level.

🔹 Consider layering into positions based on confirmation signals (e.g., if support holds for multiple days rather than entering immediately).

🔹 Transaction costs must also be factored in when making rapid adjustments to positions. (Read More)

4. Key Takeaways for Future Scenario Modeling

✔ Develop Multiple Scenarios – Avoid focusing too much on one primary expectation. Instead, create a bullish, neutral, and bearish model to prepare for any market movement.

✔ Use Volume Confirmation – Support and resistance are only valid if volume confirms the level. Next time, check whether buying volume supports price action before committing to a trade.

✔ Improve Stop-Loss Strategy – The hard stop-loss was effective, but a more dynamic approach (like a trailing stop) may help capture upside while protecting against deeper losses.

✔ Adjust Trade Execution – Future models should factor in smaller position entries rather than assuming full exposure immediately.

Conclusion: Building a More Adaptive Trading Approach

Week 3 provided valuable lessons on scenario modeling, stop-loss placement, and volume analysis. While our upside expectations did not materialize, our risk management approach helped mitigate major losses. Moving forward, more robust alternative scenario modeling and volume-based confirmations will enhance our strategy.

🔔 Next Steps:

Improve downside risk scenario planning for better trade execution.

Adjust position sizing strategy to allow for tactical entries.

Use volume confirmation as a key factor in future market projections.

By refining these elements, our Week 4 model can become even more accurate and adaptable to market conditions! 🚀

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.

As we head into Week 3 of live testing our Modified 10-Step Trading Plan, we continue refining our trading strategy through our Budget Ethical Trading Account (BETA). This dedicated trading portfolio allows us to track our active trading results separately from our Micro Stock Trading Investment Portfolio, which maintains a mix of long-term investments and short-term trades.

Micro Stock Trader: Investment Tracker

Our journey began with the 8-Step Trading Plan, inspired by Oliver Velez, which served as our foundational trading structure. However, through daily trade analysis, we identified areas for improvement, leading to the evolution of the Modified 10-Step Trading Plan (Read More). Now, with BETA in place, we can fine-tune our strategies under real market conditions and adjust as needed.

Introducing the BETA Tracker: Weekly Updates on Our Budget Ethical Trading Account

AS OF:	JANUARY 18, 2025
PORTFOLIO SUMMARY	BETA
Inception Date:	January 15, 2025
Initial Deposit:	Php 15,000.00
Net Cash Flows:	Php 21,228.38
Adjusted Principal Portfolio Value:	Php 36,228.38
Starting Portfolio Value:	Php 36,228.38
Ending Portolio Value:	Php 35,977.93
Realized Gain/Loss:	- Php 250.46
Percent Realized Gain/Loss:	- 0.69%
PORTFOLIO ALLOCATION:	100%
Universal Robina Corporation (URC)	22%
RL Commercial REIT, Inc. (RCR)	17%
Cash Balance	62%
DIVIDENDS:	0
Universal Robina Corporation (URC)	0
RL Commercial REIT, Inc. (RCR)	0
NUMBER OF TRANSACTIONS	13

Portfolio Performance Overview (January 15 to 17, 2025)

Initial Deposit: PHP 15,000.00
Net Cash Flows: PHP 21,228.38
Adjusted Principal Portfolio Value: PHP 36,228.38
Starting Portfolio Value: PHP 36,228.38
Ending Portfolio Value: PHP 35,977.93
Realized Gain/Loss: -PHP 250.46
Unrealized Gain/Loss: -0.69%

Portfolio Allocation & Trading Strategy

Universal Robina Corporation (URC): 22%
RL Commercial REIT, Inc. (RCR): 17%
Cash Balance: 62%

Key Lessons from Week 3 & BETA's Role in Refining Our Strategy

1. The Importance of Stop-Loss Adjustments in Live Trading

One of the biggest takeaways from Week 3 has been the need for a dynamic stop-loss setup in response to market volatility. Early on, we encountered significant price swings, reinforcing the importance of:
✔ Hard Stop-Loss: A rigid, non-negotiable level that protects capital from deep drawdowns.
✔ Dynamic Stop-Loss: A flexible approach that adapts to market conditions, helping us capture gains while managing risk.

Our experiences in Week 3 have shown that without proper stop-loss implementation, small trading accounts like BETA can quickly erode capital. (Read More)

2. Tactical Entries & Exits: Balancing Strategy with Transaction Costs

Another critical evolution in our trading approach has been refining tactical entries and exits, particularly when considering transaction costs. In smaller accounts, frequent trades can eat into profits, requiring a careful balance between execution and cost efficiency.

Key adjustments made in BETA:
✔ Tactical Entries: Smaller, strategic positions placed at key market levels.
✔ Core Positions: Longer-hold positions based on a strong technical setup.
✔ Transaction Cost Consideration: Ensuring each trade has a sufficient risk-reward ratio to justify execution.

These refinements allow us to protect our trading capital while maintaining active market participation. (Read More)

Key Takeaways & Next Steps for BETA

1️⃣ Live Testing Validates Strategy Adjustments:

The Modified 10-Step Trading Plan has improved execution clarity by separating tactical trading (BETA) from long-term investments (Micro Stock Trading Investment Portfolio).

2️⃣ Stop-Loss Refinements Are Crucial for Small Accounts:

Hard stops protect capital, while dynamic stop-losses ensure we stay in profitable trades while reducing downside exposure.

3️⃣ Efficient Tactical Entries/Exits Are Necessary for Long-Term Growth:

Managing transaction costs and ensuring proper trade setups will be a continued focus in upcoming weeks.

Conclusion

The launch of BETA Trading Account in Week 3 marks an important milestone in our trading strategy evolution. By tracking our active trading activities separately, we can refine execution, manage risk, and optimize tactical trading without affecting long-term investment holdings.

As we move forward, our focus will be on adapting to market conditions while maintaining strict discipline in execution. The lessons learned in BETA will serve as the foundation for improving our overall investment approach in both trading and portfolio management.

📢 Stay tuned for next week's update as we continue refining our strategy in live market conditions!

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.

As part of our continuous refinement of the Modified 10-Step Trading Plan, we are excited to introduce the BETA Tracker—a dedicated space for monitoring our Budget Ethical Trading Account (BETA) in real time. Updated every weekend after market close, this weekly tracker provides insights into our live trading adjustments, strategy refinements, and risk management decisions.

An analytical approach to monitoring trading performance, managing risk, and optimizing entry and exit strategies in the Budget Ethical Trading Account (BETA).

Tracking Weekly Progress: Refining Ethical Trading Strategies with the BETA Tracker

What is BETA?

BETA is a scaled-down, live-testing account designed to explore tactical entries, core positions, and risk management techniques under actual market conditions. Unlike our primary account, which held a larger position in URC, BETA starts with a manageable 210 shares, allowing us to refine execution strategies with minimal risk exposure.

Introducing BETA: Budget Ethical Trading Account for Live Strategy Testing

BETA Trading Action Review – January 15, 2025: Tactical Exit Amid Volatility

Key Features of the BETA Tracker:

🔹 Weekly Performance Recap – A summary of trades, position updates, and market reactions over the past trading week.
🔹 Real-Time Position Management – Track our position sizing strategy, including tactical (10% of shares) and core entries (50% of shares).
🔹 Trading Scenarios in Action – Follow our approach to testing key support levels, profit-taking at resistance, and applying disciplined stop-loss strategies.
🔹 Strategic Adjustments – See how we adapt our plan based on market movements, refining our strategy with each trade.
🔹 Documented Insights – Every trade, decision, and lesson is meticulously recorded to improve future execution in our larger accounts.

Why Follow the BETA Tracker?

By monitoring BETA, readers can gain practical insights into live market execution, risk management, and strategy optimization—all while maintaining an ethical and disciplined approach to stock trading. Whether you're a beginner or an experienced trader, this tracker serves as an educational resource showcasing real-world trading applications.

Stay updated every weekend as we document our progress with BETA, share lessons learned, and refine our strategies for more effective, ethical trading.

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.

Thursday, January 16, 2025

Applying the Modified 10-Step Trading Plan to Our BETA Account – Using the Daily Chart for Trade Setups

Our Budget Ethical Trading Account (BETA) journey has reinforced the importance of choosing the right timeframe for trade execution. After testing different approaches, we found that the daily chart is the most effective for our capital level. By applying our Modified 10-Step Trading Plan to this timeframe, we can set up trades strategically, reduce unnecessary transactions, and align better with the broader trend. The latest price action in URC (Universal Robina Corporation) provides us with a perfect opportunity to refine our approach and develop a structured plan for Week 4 (January 20-24, 2025).

Introducing BETA: Budget Ethical Trading Account for Live Strategy Testing

The Modified 10-Step Trading Plan: Enhancing Risk Management and Flexibility

Mid-Day Trading Reflection: January 16, 2025 – Lessons from the Tactical Action

Transaction Costs and Tactical Adjustments – Refining Our Trading Plan

A daily candlestick chart of Universal Robina Corporation (URC) as of January 16, 2025, displaying a downward trend with price closing at Php 68.00. The chart includes moving averages (20-MA at Php 76.82 and 200-MA at Php 98.32), increasing volume, and a bearish breakdown.

URC Daily Chart as of January 16, 2025, showing a continued downtrend with price closing at Php 68.00. The chart highlights key moving averages, volume levels, and bearish momentum after breaking below the 20-day moving average (Php 76.82).

Applying the Modified 10-Step Trading Plan to the Daily Chart

Step 1: State

Current Market Condition: URC closed at Php 68.00, down Php 1.80 (-2.58%) from the previous session.
Trend: The price is below the 20-MA (Php 76.82) and the 200-MA (Php 98.31), confirming a strong bearish trend.
Volume: Increased selling pressure, with volume at 5.939M, indicating sustained downside momentum.

Step 2: Position and Location

Previous Support (Php 70.50) has been broken, meaning we should now look at Php 67.00-Php 66.50 as the next key support zone.
Resistance remains at Php 71.50 (our prior tactical exit level) and the 20-MA (Php 76.82).

Step 3: Assess Power Bars

The large red bar on January 16, 2025, confirms a continuation of the downtrend.
There is no immediate reversal signal—no bottoming tail or green candles with high volume.

Step 4: Entry Strategy (Simplifying Tactical Actions)

New Entry Criteria for Week 4 (January 20-24, 2025):
- Only enter if the price stabilizes above Php 67.00 with a reversal candle (green hammer, engulfing candle) and high volume.
- If the price continues to drop, wait for potential buying opportunities near Php 66.00 or lower.

Step 5: Place and Monitor Stop Loss

Hard Stop-Loss for Week 4: Php 65.50 (to avoid getting trapped in further breakdowns).
Trailing stop to be adjusted based on price action near Php 67.00-Php 68.00.

Step 6: Color Change (Trend Confirmation Before Action)

We will not enter until at least one strong green day appears, showing buying pressure.
A bullish confirmation should include a higher close than the previous day with above-average volume.

Step 7: Profit Taking (Strategic Exits Based on Daily Chart)

First tactical exit at Php 71.50 (prior support turned resistance).
Secondary exit at Php 75.00 if momentum continues upward.

Step 8: Re-entry (Avoiding Frequent Trading)

No intra-day re-entries—we will only re-enter if the daily chart confirms sustained bullish movement.
If stopped out at Php 65.50, we will wait for consolidation before another entry.

Step 9: Tactical Position Management

Reduce the number of transactions to max 2 per week:
- One well-timed entry based on support confirmation.
- One exit when a key resistance is hit (or stop-loss is triggered).

Step 10: Counter-Trend Entries (Only for Strong Reversals)

If URC drops below Php 67.00 but quickly rebounds, we will monitor for a potential bounce trade.
However, if no reversal signal appears, we stay out.

Week 4 (January 20-24, 2025) Trading Plan

Scenario 1: URC Stabilizes Above Php 67.00

Action: Buy small position (50 shares) only if a green reversal candle appears with strong volume.
Stop-Loss: Php 65.50 (to protect capital).
Exit Target: Php 71.50 for partial take-profit.

Scenario 2: URC Drops Below Php 67.00 Without Reversal

Action: No trade—wait for consolidation near Php 65.00-Php 66.00.
Review Stop-Loss Placement: Adjust potential buy levels accordingly.

Scenario 3: URC Breaks Above Php 71.50

Action: Monitor for momentum. If volume supports it, we can buy on retracement to Php 70.00-Php 70.50.
Exit Target: Php 75.00 or trailing stop at Php 72.00.

Key Adjustments for the BETA Account

Limit Trading Frequency:
- Only one entry and one exit per week unless major trend shifts occur.
Avoid Intra-Day Trading:
- Entries will only be based on the daily chart, not smaller timeframes.
Respect Key Support and Resistance Levels:
- Php 67.00 is a critical zone—any buying must be confirmed by a green candle and volume.
- Php 71.50 is a hard resistance—exit immediately if reached.
Trade Only When the Reward Justifies the Risk:
- Minimum target price differential must be Php 3.00 per share to offset transaction costs.

A daily candlestick chart of Universal Robina Corporation (URC) as of January 16, 2025, marking essential trading levels for Week 4 (January 20-24, 2025). The chart shows hard resistance at Php 71.50, support at Php 67.00, stop-loss at Php 65.50, and a bargain price at Php 60.00, with volume analysis.

URC Daily Chart as of January 16, 2025, setting up the Week 4 Trading Scenario. The chart highlights key support at Php 67.00, resistance at Php 71.50, and a hard stop-loss at Php 65.50, with a bargain price of Php 60.00 for potential accumulation.

Final Thoughts

Our experience over the past two weeks confirmed that the daily chart is the best timeframe for our BETA Account. By simplifying our tactical actions, focusing on stronger price moves, and avoiding intra-day noise, we can maximize capital efficiency and minimize unnecessary losses.

For Week 4, our strategy is clear: wait for a confirmation candle at Php 67.00 before entering, set a tight stop-loss, and target Php 71.50 for exits. This disciplined approach aligns with our goal of small-scale, ethical trading with cost-conscious decision-making.

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.

The second day of our BETA Account testing provided a critical lesson: while executing tactical entries and exits is important, factoring in transaction costs (friction costs) is essential for realistic and sustainable trading. By aligning our experience with our Modified 10-Step Trading Plan, we can better manage costs, improve profitability, and reduce capital erosion. Here’s what happened and how we’re adapting.

A 5-minute intra-day chart of Universal Robina Corporation (URC), annotated with tactical entries at Php 70.85 and Php 71.20, a tactical exit at Php 71.50, and a stop-loss at Php 70.10.

Annotated 5-minute chart of URC showing tactical entries, exits, and stop-loss levels on January 16, 2025, with key lessons on transaction costs.

Applying the Modified 10-Step Trading Plan

Step 1: State

We began January 16, 2025, with 110 shares of URC in the portfolio and the potential to re-enter 100 additional shares. Following yesterday’s tactical exit at Php 70.00, our focus was on observing the market open for opportunities to rebuild the tactical position near key levels.

Step 2: Position and Location

The day opened with a gap-up and a strong green elephant bar, moving above Php 70.50 (key support level). The price quickly rose to Php 71.20, supported by increasing volume and a rising 20-MA. This positioning indicated bullish momentum, but resistance near Php 71.50 was already identified.

Step 3: Assess Power Bars

The green elephant bar at the open was followed by smaller green bars, showing strong initial momentum. However, as the price approached Php 71.50, the candlestick range began narrowing, and volume started to decline—signaling potential buyer fatigue.

Step 4: Entry

We executed tactical re-entries as follows:

20 shares at Php 70.85 after the first green bar.
80 shares at Php 71.20 during the continued rally.

While these entries aligned with the momentum, they were frequent and at relatively high levels, which compounded the impact of transaction costs.

A 5-minute intra-day chart of Universal Robina Corporation (URC), annotated with tactical entries at Php 70.85 and Php 71.20.

Annotated 5-minute chart of URC showing tactical entries.

Step 5: Place and Monitor Stop Loss

We placed our stop-loss at Php 70.10 for all positions to minimize potential losses if the market reversed below the key support level of Php 70.50.

Step 6: Color Change

At approximately 10:30 AM, the price action began to show signs of weakness:

Narrow-range red candlesticks formed near the Php 71.50 resistance.
Volume decreased, indicating fading buying pressure.
A clear color change from green to red signaled the end of the upward momentum.

Step 7: Profit Take (with Tactical Exits)

Following the color change, we executed a tactical exit of 100 shares at Php 71.50, locking in small gains from the rally. This exit aligned with our pre-identified resistance level but didn’t fully account for the impact of transaction costs.

Step 8: Re-entry

After the tactical exit, no further re-entries were made as the price showed weakening momentum. However, hindsight suggests avoiding the initial multiple re-entries at higher levels (Php 70.85 and Php 71.20) to minimize transaction costs and risk.

Step 9: Tactical Position Management

By mid-day, a sharp gap-down occurred, breaking below the 20-MA (Php 70.94) and the key support level (Php 70.50). Based on our plan, this should have triggered our stop-loss at Php 70.10, prompting an exit of the remaining 110 shares to preserve capital.

However, due to execution challenges, we were unable to exit at the planned stop-loss level and instead carried the 110 URC shares until the market close, exposing the position to further downside risk. This unexpected hold reinforced the importance of strict adherence to stop-loss execution and the need for proactive order placement to manage risk effectively. Moving forward, we will refine our execution strategy by:

Using automatic stop-loss orders instead of manual execution to ensure timely exits.
Monitoring price action more closely near key levels to avoid missed sell opportunities.
Implementing a contingency plan for managing positions when rapid price movements occur.

This experience underscores the critical role of disciplined position management in preserving capital and maintaining the integrity of our Modified 10-Step Trading Plan.

Step 10: Counter-Trend Entries

Given the bearish reversal and high selling volume, no counter-trend entries were considered. The focus shifted to protecting capital and re-assessing the strategy.

Lessons Learned

Transaction Costs Are Real and Impactful:
- With a Php 1.00 break-even differential, small price movements are insufficient to generate net profits after fees.
- Frequent re-entries at tight price ranges compounded costs, leading to capital erosion.
Optimize Tactical Actions:
- Instead of multiple small re-entries (e.g., Php 70.85 and Php 71.20), consolidate trades into fewer, larger positions at key support levels.
Focus on Wider Price Differentials:
- Future tactical trades will only be executed if the potential price movement exceeds Php 2.00, ensuring profitability after costs.
Refine Profit-Taking and Re-Entry Strategies:
- Avoid re-entries near resistance levels (e.g., Php 71.50) unless clear signs of continued upward momentum are present.
Preserve Capital During Reversals:
- The stop-loss at Php 70.10 effectively limited losses, highlighting the importance of disciplined risk management.
Strict Stop-Loss Execution Is Essential
- Failure to execute the planned stop-loss at Php 70.10 resulted in unnecessary downside exposure, reinforcing the importance of following the trading plan without hesitation.
- Use automated stop-loss orders instead of manual execution to prevent missed exits during rapid price movements.
- Always have a contingency plan for market volatility to ensure capital protection, even if price action moves unexpectedly.

Action Plan for the BETA Account

Limit Trading Frequency:
- Cap the number of transactions to 4 per week to reduce friction costs and focus on high-quality setups.
Target Wider Price Differentials:
- Only execute trades where potential price movements exceed Php 2.00 per share to offset transaction costs.
Strategic Position Sizing:
- Consolidate tactical entries into fewer, larger positions at key levels (e.g., Php 70.00 or Php 69.80) to improve cost-efficiency.
Re-Entry Discipline:
- Re-enter positions only after confirmation signals (e.g., green candlesticks with strong volume at support levels).
Enhanced Stop-Loss Placement:

Align stop-loss levels closer to key technical levels (e.g., Php 70.50 or Php 69.80) to minimize unnecessary exposure.

By aligning our trading plan with realistic cost considerations, we’re building a strategy that prioritizes sustainability and long-term success. This journey is all about learning, refining, and adapting—stay tuned as we continue to test and grow!

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.

GAWLOO: Ang Lugawang May Sarap ng Southeast Asia — Gawa ng Batangueñong Galing Abroad

Kung taga-Rosario, Batangas ka at nag-crave ka ng lugaw na may level-up na twist—eto na ang sagot sa panalangin ng sikmura mo: GAWLOO, The Southeast Asian Congee Experience.

GAWLOO, The Southeast Asian Congee Experience facade

📍 Matatagpuan sa V. Escaño St., Brgy. C, Rosario Batangas, si GAWLOO ay hindi lang basta kainan — isa siyang kwento ng pangarap, passion, at panlasang umikot sa Asia.

GAWLOO, The Southeast Asian Congee Experience Dine-In

Ang may-ari, si Jay Ubana, ay isang Batangueñong cook na nagtrabaho sa Singapore at Dubai ng 12 taon. Sa dami ng napuntahan niyang bansa—Hong Kong, Taiwan, Singapore—natutunan niyang i-appreciate ang iba't ibang bersyon ng congee. “Paborito talaga ng mga Pinoy ang lugaw,” wika ni Jay, “Kahit anong oras, kahit anong pakiramdam—masarap maglugaw.”

⭐ Lasa't Alaala sa Bawat Higop

Hindi lang basta lugaw, kundi southeast Asian-inspired congee na may toppings na mala-ulam sa sarap.

🍲 Seafood Gawloo at Lechon Gawloo — ang kanilang best-sellers na puwedeng pang-breakfast o pang-dinner.

🍛 Mix & Match Toppings: Tuwalya, Chicharon Bulaklak, Atay, Chicken, Fried Tokwa at iba pa.

🍗 Rice Meals tulad ng Chao Fan with Pork Siomai, Chicharon Bulaklak, o Lechon Kawali — swak sa mga ayaw ng sabaw pero gusto pa rin ng siksik sa lasa.

🧋 Drinks? May Black Gulaman at Lychee para pampawi ng uhaw habang humihigop ka ng mainit-init na lugaw.

💸 Presyo na Kayang-Kaya

Hindi mo kailangang bumyahe pa sa abroad para matikman ang ganitong congee—abot kaya lang ang Small Bowl na may 1 Topping, at kung mas gutom ka, may Large Bowl para iyo at para sa inyong lahat. Pwede ka ring magpa-top up ng 2, 3 o 4 na toppings para sa ultimate lugaw overload!

🤳 Para sa mga G na umorder online

Pwede kang magpa-deliver! Text o tawag lang sa 09397785658. Hanapin lang ang GAWLOO sa Facebook para sa menu at updates.

Sa totoo lang, sa bawat higop ng lugaw sa GAWLOO, parang may yumayakap sa’yo—maalala mo si Nanay o si Lola na nagluluto ng lugaw tuwing masama ang pakiramdam mo. Ngayon, kahit wala si Nanay sa tabi mo, may GAWLOO ka sa Rosario.

Supportahan natin ang lokal! Tikman ang lugaw na may kwento. Tikman ang GAWLOO.

Pages

Sunday, January 19, 2025

Contents:

1️⃣ Modified 10-Step Trading Strategy Scenario

2️⃣ Retracement Trading Strategy

Key Differences Between the Two Approaches

Conclusion: Which Strategy Is More Effective?

Related Readings

Contents:

Understanding Retracement in Trading

The Key Levels of Retracement Trading

Equivalent Discussion for a Downtrend Power Move

The Sweet Spot for Trading Retracements

Practical Application

Tactical Entry Assessment for URC at 68 Level (Week 4)

Scenario Analysis

Rationale for Entering at 68 Using a Stop Limit Order

Strengths of Entering at 68 Level

Weaknesses and Risks

Probabilities Based on Strategy

Overall Assessment

Conclusion

Related Readings

Contents:

1. Strengthening Downside Scenario Modeling

Lessons from Week 3:

Week 4 Adjustments:

Simulated Downside Scenarios & Tiered Support Modeling

🔻 Scenario 1: Gradual Sell-Off & Controlled Decline

🔻 Scenario 2: High-Volume Breakdown Below 67.00

🔻 Scenario 3: False Breakdown & Rapid Reversal

2. Incorporating Volume Confirmation for Support & Resistance

Lessons from Week 3:

Week 4 Adjustments:

3. Tactical Adjustments to Trading Strategy

Final Takeaways for Week 4

Related Readings

Saturday, January 18, 2025

Contents:

1. Comparing Our Week 3 Model vs. Actual Price Action

2. What We Did Well in Week 3 Scenario Modeling

3. Where We Can Improve Moving Forward

🔸 1. More Focus on Downside Scenario Modeling

🔸 2. Incorporate Stronger Volume & Trend Analysis

🔸 3. Refine Tactical Entry & Exit Decisions

4. Key Takeaways for Future Scenario Modeling

Conclusion: Building a More Adaptive Trading Approach

Related Readings

Contents:

Portfolio Performance Overview (January 15 to 17, 2025)

Portfolio Allocation & Trading Strategy

Key Lessons from Week 3 & BETA's Role in Refining Our Strategy

1. The Importance of Stop-Loss Adjustments in Live Trading

2. Tactical Entries & Exits: Balancing Strategy with Transaction Costs

Key Takeaways & Next Steps for BETA

Conclusion

Related Readings

Contents:

What is BETA?

Key Features of the BETA Tracker:

Why Follow the BETA Tracker?

Related Readings

Thursday, January 16, 2025

Contents:

Applying the Modified 10-Step Trading Plan to the Daily Chart

Step 1: State

Step 2: Position and Location

Step 3: Assess Power Bars

Step 4: Entry Strategy (Simplifying Tactical Actions)

Step 5: Place and Monitor Stop Loss

Step 6: Color Change (Trend Confirmation Before Action)

Step 7: Profit Taking (Strategic Exits Based on Daily Chart)

Step 8: Re-entry (Avoiding Frequent Trading)

Step 9: Tactical Position Management

Step 10: Counter-Trend Entries (Only for Strong Reversals)

Week 4 (January 20-24, 2025) Trading Plan

Scenario 1: URC Stabilizes Above Php 67.00

Scenario 2: URC Drops Below Php 67.00 Without Reversal

Scenario 3: URC Breaks Above Php 71.50

Key Adjustments for the BETA Account