Yesterday, I showed you how we earned approximately 25 percent on ISM.
Today, I’ll show you how we lose roughly 20 percent on the first round and how we earned nearly 50 percent on the second round trading Now Corporation (NOW).
Just when you thought that I would only want to raise the flag of my wins, here I am showing you how my data-driven forecast proved me wrong on the first round trading NOW. I’ll show you how it all started with some time-stamped screenshots from our Private Clients Forum where I guide our subscribers.
First, here’s the time-stamped screenshot.
Next, here’s the exact thing that I posted for our clients last September 24, 2018.
NOW’s closing price is above the 10SMA and MACD is above the signal line already.
The Fast Stochastic already crossed above the Slow Stochastic. That’s a bullish signal for me.
With these buy signals appearing while RSI and Stochastic are in the neutral level, that supports the idea that NOW still has more rooms for a bullish price action.
Support is at 6.77 while resistance is at 8.05 as a precursor to 10.00
If you will enter a new position at 7.70 and sell at 8.05, that will give you an upside of 5 percent only.
If you will enter at 7.70 and sell at 10 (if NOW moves up to that level), that’s an upside of nearly 30 percent.
But I don’t advise setting a fixed price as your selling point. Use a TRAILING STOP LOSS instead.
For the new members here, please read Newsletter Vol 1. No. 13. I’ve explained this trailing stop loss in Filipino in that newsletter.
NOW’s daily volume is slowly moving toward its 30-day volume average. If the price continues to register a green candlestick and volume touches or crosses the 30-day volume average’s line, that will reinforce the bullish momentum of NOW.
Be extra careful, however. NOW has a HIGH RISK level due to its risk percentage of 73.53%.
NOW registered a Net Foreign Selling worth P1,094,062.00 as of September 21, 2018. On a 30-day trading period, NOW is on a Net Foreign Buying worth PHP2,307,340.00.
The month-to-date sentiment of the top 10 players of NOW remains bullish as their buying average is still close to NOW’s prevailing price at 7.70.
Trading participants of NOW with a 100% Buying and Selling Activity from Sep-03-2018 to Sep-21-2018 at 03:30PM:
12 out of 89 participants or 13.48% of all participants registered a 100% BUYING activity
5 out of 89 participants or 5.62% of all participants registered a 100% SELLING activity
Top 10 Players’ Buying Average: 7.6199
Top 10 Players’ Selling Average: 7.6678
The psychological average price of the top 10 players from Sep-03-2018 to Sep-21-2018 is from 7.6199 to 7.6678.
Trading participants of NOW with a 100% Buying and Selling Activity from Sep-17-2018 to Sep-21-2018 at 03:30PM:
19 out of 63 participants or 30.16% of all participants registered a 100% BUYING activity
8 out of 63 participants or 12.70% of all participants registered a 100% SELLING activity
Top 10 Players’ Buying Average: 7.2641
Top 10 Players’ Selling Average: 7.3407
The psychological average price of the top 10 players from Sep-17-2018 to Sep-21-2018 is from 7.2641 to 7.3407.
Trading participants of NOW with a 100% Buying and Selling Activity as of Sep-24-2018 at 01:52PM:
5 out of 24 participants or 20.83% of all participants registered a 100% BUYING activity
8 out of 24 participants or 33.33% of all participants registered a 100% SELLING activity
Top 10 Players’ Buying Average: 7.6268
Top 10 Players’ Selling Average: 7.6163
The psychological average price of the top 10 players as of Sep-24-2018 at 01:52PM is from 7.6163 to 7.6268.
The most active range as of the time indicated on the Price-Volume Distribution chart below is between 7.60 and 7.70.
The Disaster Happened
The disaster happened last October 10, 2018. NOW closed at 7.49 the previous day. Then, it dropped by more than 31 percent on October 10th.
Our entry price was somewhere around 7.60. Those who followed a 10 percent risk tolerance didn’t get the chance to sell at their ideal trailing stop loss around 6.84 because NOW opened at 5.00. Quite luckily, it hit an intraday high of 6.38 on October 10th. That made us quickly reduce our paper loss from a little over 30 percent to 20 percent.
Things happened so rapidly. We lost roughly 20 percent of our trading capital for NOW on October 10th.
This is a perfect example of how important it is for you to have the time to monitor the market if you want to venture into short-term trading.
Add to the pain the fact that there’s no stop loss feature in the Philippines yet.
Do you now understand why short-term trading is so demanding of our monitoring time?
Also, remember that I was so data-driven with my forecast on September 24th. Here’s the truth: no matter how data-driven you are, the market will still decide. But that’s not an excuse to base everything on instinct and to never have a data-driven decision anymore.
Data analysis can reduce but not eradicate risk. Acknowledge the Pacific Ocean-sized difference between those two verbs.
How We Recovered
I knew that traders were all on the lookout for rumors about the third telco company during that time. So I continued to monitor NOW.
In fact, I continuously posted daily updates of NOW on its thread in our Private Clients Forum.
NOW registered a green volume bar on November 8, 2018. While MACD was still below the signal line and the price was still below the 10-day moving average back then, pre-empting the confirmed buy signal works sometimes, but it’s too risky.
If you’re not a high-risk trader, I do not advise pre-empting confirmed buy signals.
So I posted an update on November 12, 2018. That was the day when NOW began to trade sideways near the then resistance at 3.12. Dilly-dallying near 3.12 lasted for 10 to 11 trading days.
Every day, I gave our clients the actively traded price points and the top 10 players’ buying and selling averages so they would have a basis where to park their buying price.
See the screenshots below. I can’t include all screenshots. There’s a lot.
When NOW went above 4.00, the volume started to weaken bit by bit. I also noticed that the price slid little by little.
For EquiPicks subscribers, being on top of each trader’s trailing stop loss is the first rule of active trading. No one can say, “Oh, I have no idea about this trailing stop loss,” because I issued Newsletter Vol 1 No 13. I wrote that newsletter in Filipino (Tagalog). I described what a trailing stop loss is and how it is computed.
Those who always apply a 10 percent risk tolerance for short-term trading must have sold their position between 4.00 and 4.05.
Those who re-entered NOW between 1.85 and 2.00 and sold between 4.00 and 4.05 earned roughly 50 percent.
All in all, those who played my trade setup for NOW on both rounds did not only recuperate from their losses on the first round but also registered a net profit of approximately 30 percent (round 1 losses – round 2 gains).
What’s the Lesson Here?
The profitability in trading is not about having zero losses. You can’t avoid losses. I can’t avoid them. In fact, avoiding losses is not my goal but minimizing them. At the end of the day, the goal is to have more wins and a few losses.
You minimize losses by being data-driven in all that you do. It also makes a lot of difference when you have a mentor who guides you.
Some of our clients can analyze on their own yet they still decided to subscribe to EquiPicks.
What do you think is the reason?
Aside from they want to have an access to my detailed and in-depth analysis, they want to exchange ideas and insights with me.
When two or more bright minds synergize, great things can happen.
I know my analytical style does not look familiar to many. Firstly, most of my tools are not conventional or classical tools that existed before I was born. I developed my own tools. Secondly, I have my own way of looking at data. I have my own framework.
I want you to know that all of these charts that I use, the ways on how to use them, how to interpret them, and how to use that interpretation to make a trade or investment decision are documented in our Quick Start Guide.
If you will only make time to read the Quick Start Guide without rushing, if you will only read my posts in the Private Clients Forum, and if you will only actively participate on discussions in the forum, you’ll be able to see things through my eyes in a month or two.
There’s a Private Clients Forum, anyway. If my simplified version is not simple enough for you, you may post your question in the Private Clients Forum.
Do you have questions about this trade dissection of NOW? Please comment below.