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Universal principles:
Applied Applied Applies
to any market place. to any instrument e.g. shares, warrants, CFDs to end of day or intraday data* Live data: Easy Trader, R99.00 per
month.
Critical Components
Selection:
Instrument* company
Timing
One trending indicator to determine long-, medium and short term trend e.g.
MAC-D
Investing
Selection: Required: Long term upward trend Shares in sectors that outperform the index and is the best performer in the sector over at least 3 years. How? Compare all the sectors to the index, using Relative Strength. RS above 1: 1st outperformed 2nd Compare all the shares in the sector to the sector, to find the best performer consistently over 3 years. Timing:
is up.
Entry: Long term trend must be up, low on price on trading indicator or previous time frame. Exit: End of long term trend.
Select a graph Select amount of data in line with intent Select a second graph: Enter the short code into the second window below the graph on the left hand side Select Rel Str from dropdown stats window Interpretation:
List of indices
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Shares in sector
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Shares in sector
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Shares selected
News
Results
Dividends
Announcements
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Trading
Selection: Derivatives:
Derived from an underlying instrument. Instruments: warrants, SSFs, CFDs Differences between shares and derivatives Trending or trading underlying* Volatility and trading range* (H-L: daily, weekly or monthly)
Timing: Short term trading: Buying and selling frequently Entry: Short term trend align with medium- and long term trend, low on price. Exit: Short term price or trend. Used for either or: Hedge*, Speculate or capital conversion
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Help: Downloads
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Speculation
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Hedging
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Chart options
Line chart: High, low or close Bar chart or OHLC Candlesticks Log in Tools: Price charts: Interactive charts Select a chart Select a chart option from the OHLC dropdown menu Select a time frame: Daily, weekly or monthly
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Line chart
High Low Close: Most important
Select a chart Select high or low or close from the OHLC dropdown menu
Upward trend: Higher highs, lows and closing prices. Downward trend: Lower highs, lows and closing prices.
Look whether exceeding previous highs or lows, especially extreme highs and lows.
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Position of close: + close above open and close near high - close below open and close near low Change in average trading range
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Upward trend: Close closer to high Downward trend: Close closer to low
Key reversal day:
higher close
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Occurs towards the end of a trend Usually with low volume Indicates very strong selling or buying pressure Might or might not be filled
Break-away gaps:
Beginning of new trend Followed by bigger trading range, as a result of increased volatility & volume Unlikely to be filled
Run-away gaps:
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Japanese Candlesticks
Body: Difference between O and C Shadows: H and L Open, close, high and low.
Body colour: + Blue candlestick: buying pressure > selling pressure and close > open - Red candlestick: selling pressure > buying pressure and open > close Long bodies indicate strength Long shadows indicate uncertainty and can result in a change in direction.
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Reversal signals
Changes in:
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Piercing pattern
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Red candle opens at or above previous close of blue candle. Red candle closes at least halfway down the previous body of the blue candle
, between half way and the previous blue candles opening price.
After an uptrend
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Red candle opens above previous close of blue candle. Red candle closes at previous close of blue candle.
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Up Down Sideways
For entry and exit answers Trading indicator: To establish price movement
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Trading Indicator
Price movement Leading indicator
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Stochastic
Momentum oscillator High-low range over x number of days and the relationship of the close to the low over that period. %K: Difference between last close and lowest low over a period %D: High-low ratio oscillator
Buy: %D Stochastic breaks up through %K or red up through blue. Sell: %D Stochastic breaks down through %K or red down through blue.
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Stochastic
Select graph Select Stochastic from dropdown stats window Not necessary to change parameters. Interpretation: Buying opportunity going up if red line goes up through blue line. Opportunity to get out of derivative position making money going down or in to make money going up. Selling opportunity if red line goes down through blue line, sign that price is coming down not necessarily trend. Opportunity to get out of derivative position making money going up or in to make money going down. Trade in the direction of the trend.
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Long term trend Medium term trend Short term trend Price movement Compare DJ-IND with DJ-TRAN
DJ-IND
ALSH Sector
Share
Index: ALSH long-, medium-, short term trend and price movement Sectors: Relative strength against index to find outperformers or underperformers and long-, medium- , short term trend and price movement. Shares: Relative strength against sector to find outperformers or underperformers, as well as long-, medium-, short term trend, as well as price movement.
OR Selection based on how much & how fast it moves. Timing: MAC-D and Stochastic Long-, medium and short term
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Strategy Summary
DJ-IND trend & price movement ALSH Index trend & price movement Sector selection: Outperforming index using RS Shares selection: Outperforming sector using RS Sector Timing: Graph option e.g. candlestick chart Trending indicator: e.g. MAC-D for trend Trading Indicator: e.g. Stochastic for entry, re-entry, exit , re-exit or adding to position
Share
DJ-IND
ALSH
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Summary
Measure under- and out performance. Select or choose between two instruments. Compare two instruments. RS above 1: 1st outperformed 2nd RS going up the page: 1st increasingly performing better in comparison to 2nd
Relative Strength
MAC-D
Trend following momentum indicator Relationship between 2 MAs of a price Buy: MACD (black line) up through MA (blue line) Sell: MACD (black line) down through MA (blue line) Long term trend: monthly default parameters (12 & 26) or hourly Medium term: weekly default parameters (12 & 26) or 30 minute chart Short term: daily default parameters (12 & 26) or 15 minute chart Very short term trend: daily data and change 12 & 26 to 3 & 8 or 5 minute chart Intraday: Use default parameters: Long term trend
Stochastic
Upward movement: closed near high Downward movement: closed near low Buy: %D Stochastic (red line) breaks up through %K Stochastic (blue line) Sell: %D Stochastic (red line) breaks down through %K Stochastic (blue line)
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Summary
Engulfing white Piercing pattern Bullish Counter Attack Hammer Inverted hammer Tweezer bottoms Engulfing black Dark cloud cover Bearish counter attack Shooting star Hanging man Tweezer top
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Disclaimer
SBG Securities (Pty) Ltd Presentations Disclaimer for Mariette Kotze Presentation This document and any associated verbal presentation has been prepared and presented by Mariette Kotze and is not an official confirmation of terms, does not represent an express or implied offer, nor does it create any liability or obligation on SBG Securities (Proprietary) Limited (SBG Sec.), registration number 1972/008305/07. Any rates, levels and prices quoted herein or verbally presented are indicative only and although reflective of market conditions prevailing at the relevant time do not constitute an offer to transact at such levels and are supplied for illustrative purposes only. Any transaction or agreement to perform certain services that may be concluded pursuant to this document and/or any associated verbal presentation shall be in terms of and confirmed by the signing of appropriate documentation, on terms to be agreed between the relevant parties. SBG Securities (Proprietary) Limited, or an associated company, may have effected or may effect transactions for its own account in any securities or other investments outlined in this document and any associated verbal presentation or any investment related to such an investment. Prospective investors should obtain independent advice in respect of any product detailed in this document and/or associated verbal presentation, as SBG Securities (Proprietary) Limited provides no opinion or advice including investment, tax or legal advice and makes no representation or warranty about the suitability of a product for a particular client or circumstance. Transactions described in this document and any associated verbal presentation may give rise to substantial risk and are not suitable for all investors. SBG Securities (Proprietary) Limited will only provide investment advice if specifically agreed to by SBG Securities (Proprietary) Limited in appropriate documentation, signed by SBG Securities (Proprietary) Limited. This information is to be used at your own risk, and SBG Securities (Proprietary) Limited makes no representation with regards to the correctness of the information herein. By accepting this document, you agree to be bound by the foregoing limitations. SBG Securities (Proprietary) Limited is a subsidiary of the Standard Bank Group Limited, an authorised user of the JSE Limited and an authorised Financial Services Provider.
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Copy Right
The material supplied by Mariette Kotze to SBG Securities (Pty) Ltd. is protected by law and may not be copied, reproduced, printed or otherwise distributed, whether in part or in full. The context of the content may not be construed in any way. The material is intended for personal or private use only.
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