Jse new trading system
Relative Strength Column-U is a very useful tool - the 1-month Relative Strength indicator. It shows what percentage of the JSE this share out-performed in terms of 1-month share price growth. This puts it among the top performers on the JSE. Obviously, if the value here is then the share is the top performing share and if the value is 0 then it is the worst performing share. This can be quite useful to you when deciding what share to choose from a list you are whittling down. Want to know which shares are performing the best in a particular sector? Exclude illiquid shares to make the list even shorter and then focus on those shares with a relative strength greater than You'll be surprised how small the list is! The more bars fill up in the indicator, the more unusual the respective activity. For advancing shares, a high "volume buzz" coupled with a low "trades buzz" is very useful to tip you off to insider movement or smart money or institutions moving into shares on the expectation of some favorable news or the discovery of good value by their research teams that is not yet known by the general public. It assists you jump in early on a possible big trend. Unusual volume for a declining share obviously points to the opposite, i. When there is a high "trades buzz" then this is indicative of the general investing public climbing aboard and most times is actually accompanied by a low "volume buzz"! It is rare to see high volume and trade "buzzes" together! This measures the strength of the shares advancing trend, from 0 through to 4 and uses the shares' price in relation to its day and day moving averages. The column tagged "T" shows the total signal strength from 0 to 4 gained from the points derived in the "15", "30" and "X" columns. The higher the value, the stronger the bullish trend of the share. A value of zero probably depicts a share in a strong decline. You will note some cells filled in with a yellow exclamation mark or a red cross. The yellow exclamation mark tells you that the up-crossing occurred within the last 3 days. It is very useful to know that a share crossed up through its 15 or 30 day moving average within the last 3 days, as this means you can catch a trend early. When the "X" column has an exclamation mark, it tells you the day average crossed up through the 30 day moving average at least 3 days ago. Simply filtering a column to only show exclamation marks will reveal all new on the JSE that have just performed this action jse the last 3 days. A red cross means the opposite to the exclamation mark - it means a cross-down occurred within the last 3 days normally a bearish signal, whereas up-crossings are bullish signals. These indicators are useful if you are interested in a share and trying to time the purchase. Only buy when there is at least 1 bar strength on the signal! A green flag means that today's price as depicted in the report actually represents the new high or new low constituting the Donchian break. In either case the share is trading at or near a day high or day low which is always interesting information. Donchian trend-following theory states you should buy a share when it makes new highs and sell a share when it makes new lows. Several characteristics of the shares' price action show strong signs of a reversal. Additionally, the price of the day is greater than one of the previous two days, and the previous day's price is greater than the minimum of the last 6 days. You are advised to examine these shares after filtering out some of the illiquid ones which will be hard to trade or sell if you need to get out with your own charting package to get a feel for the price curve and trading opportunity. It is a measure of "conviction" or "sincerity" in a share's upward price action. The value is high during powerful up-moves, and a value of zero represents a weak or vulnerable share. There is a blue histogram spark-chart in column AF representing the Sin for the share for the last 20 trading days. The number in the cell depicts the actual Sin score for the day. We can see that RESILIENT has posted 4 back-to-back advancing days in the last 2 weeks and that its Sin was steadily climbing - showing a powerful up-move in the making. If a share is rising, but the Sin is declining, then this is a sign of WEAKNESS entering the share's price action, a possible warning of a peak. If the share is rising but its Sin value is 0 or 1 then it means the rise is not underpinned with much conviction, rising one day then declining the very next day, slowly inching upwards as the advances slightly overcome the declines. Apart from being an excellent gauge for the power behind a share's rise, this indicator is excellent for detecting shares that are making high-confidence trough reversals. When a share has had a Sin reading of 0 or 1 for a protracted period and then suddenly the Sin rises by 3 points from 0 to 3 or from 1 to 4 then this is a sign the correction is over and buyers are returning to share, propelling it upwards with conviction. It system a lot for a share that was languishing to suddenly register 3 or 4 back-to-back advances. When this occurs, you will see a green encircled tick in the "SV" column, telling you this share appears to have made a trough reversal V representing the "bounce". Have a look at SPG in the above picture. This is a classic "Sincerity Trough Reversal". You can see from the Sin histogram that SPG's Sin score was reading zero for quite some time no blue bars on the left of the histogram. You can see from SPG's history chart, which represents the last 40 days trading, that this new associated with a period of price decline. It is common for a share to be declining when it cannot muster up any back-back advancing days. But then one day, SPG registered a back-back advancing day, shown by a little blue vertical line in the Sin histogram, just under the "3". The reading stayed at 1 for a while a classic sign of the share "bottoming" or forming a base for the trough and then very recently, the Sin rose to 2 and then to 3 the current reading meaning buyers are flocking back to snap up the share which is now supposedly "undervalued" or showing "value". The green tick tells us this would be a good time to "take a punt" if we are trading CFD's or "buy on the dip" if we were investors perhaps interested in this share. The screen-shot taken above is actually the resulting output of pressing the "Sincere-V" blue function button. This automated function will find all the shares on the JSE that have had their Sin languishing at 0 or 1 for a while and suddenly having risen to 3 or more. If you want to catch the trends early, focus on the shares with Sin readings of 3 or 4. If a share appears in this list with a Sin of 6 and above, then chances are the reversal occurred a few days back and you might trading a bit late into the move only of concern to short-term traders. This is incredibly useful to get an "at-a-glance" view of a share's price history without having to open a charting package. You will notice that your mouse cursor turns to a hand when you hold it over the spark-chart. You will notice that the Java Charts have the 15 and 30 days moving averages we use in the TREND METER, programmed into them already. If you look at SPG's TREND meter, you will see we were showing a green tick in the "15" column, new SPG was trading well above its day average, but we had a yellow exclamation mark in the "30" column, alerting us to the fact that SPG has crossed up through its day average within the last 3 days. Sure enough, you can confirm this event with the Java Chart above. If you are a cautious type, you may want to wait for a yellow exclamation mark to appear in the "X" column, when SPG's day average crosses up through its day average. If you watch JSW every time it is published, you will be alerted the day this happens! SAFETY SCREENS The 5 columns from AH-AL depict various screens we maintain on the JSE for various proven investing strategies. Shares that belong to these screens normally have characteristics associated with a high probability of success from an investing perspective. If you click on the name of the screen, you are taken through to our website where we discuss the in-depth theory behind the relevant screens. These columns flag if the share belongs to a certain fundamental category. These fields are predominantly associated with SAFETY as inclusion in these categories significantly enhances a shares' odds of success, based on well known international research, which our back and forward tests have validated for the JSE. Once per week, we run screens on the JSE to determine each shares' inclusion in these categories. Piotroski The Piotroski screen gives a score from 1 bad to 9 good for the share's financial practices and standing over the last two reporting periods. If a cell is blank as with REI it is because there is some reason this score cannot be computed. Either the counter is new, just listed, does not post certain items needed by Piotroski such as banks which don't post revenue figures for example or has not posted two sets of results yet. The share is in the top-5 of the screen on the TOP universe Black button: The share is in the top-5 of the screen on the TOP universe Yellow button: The share is ranked in the screen on the TOP universe Red button: Black buttons are better than red buttons. You can't say that green buttons are better than black buttons or that yellow buttons are better than red buttons as this depends on your risk profile. But in general, for beginners at least, green button shares are "kinder" than black button shares merely because they are much larger counters. O'Neils CAN-SLIM Column AJ shows if the share is a rare CAN-SLIM candidate. These shares have shown consistent, accelerating EPS growth over the last 3 years and 6 reporting periods, but they themselves are categorized by a signal strength button as follows: CAN-SLIM shares showing 4 signal strength are the "Blue Blood" candidates - but they are very rare, as of today's writing there are only 4 such shares on the JSE! Larger shares are "less risky" than smaller shares, but of course less risk implies, in general, less reward. This is a very good strategy for picking high-income shares that also show good capital growth. The buttons are colored as follows: Ranked by shareholder yield Orange: Ranked by shareholder yield Red: Ranked by shareholder yield Green is better than orange, which is better than red, which is better than nothing - at least as far as this strategy is concerned! The first 8 are the "Leaders" functions, shown in green and red buttons. Leaders are defined by the top volume, top value, top activity and top market-cap respectively. All the leaders are defined as being in the top 95th-percentile of their respective category i. When the screen is completed, the list is shown sorted by price appreciation or depreciation for the day "1D" The 9th and 10th buttons "TOP" are the big hitters - they are shares that simultaneously qualify for ALL the leader positions, i. This list is obviously much shorter than the previous ones that only look at one aspect of "leadership". Very useful if you are trading a product that tracks the TOP and you want to know what shares were responsible for its rise or fall on any given day or even over the last 5 or 20 days. This offers a quick way to click one button and be presented with all your investment, trading and watchlist shares so that you can see at-a-glance exactly what happened with them for the day. Particularly useful for shares you are "stalking" and waiting for an exclamation mark to appear in one of the TREND columns or in the Sin-V column to signal a BUY. The picture below shows the remaining 19 function buttons to the right of the page: This just saves you having to manually unclear all the sorts and filters in the various columns yourself if you want to reveal all the shares again to run more complex screens not covered by the macros. Clicking this button reveals shares that PVM considers "bargain basement" and that have Piotroski scores greater than 7. These are not "flash-in-the-pan" Donchian breakouts, these are shares that have been showing significant strength for a period the only way to get a full TREND score and finally culminated in a breakout. The final list is sorted by relative strength. It is very risky buying these shares. Make sure none of these shares are in your portfolio! Experienced traders may opt to take out short positions on these shares when the timing is right when they make Donchian lows or red crosses start appearing in the TREND columns or when Sin starts declining rapidly, even jse the share continues to climb. Whilst traders can play these shares, they are not advised for long term investors except if you plan to short. We also only include shares that have advanced in price over the last 5 days. We exclude illiquid shares, meaning at least trades were made in the share in the last 10 days. Finally, we restrict the list to shares that have at least a TREND score of 1. This screen always produces some interesting candidates, especially when you see shares in the final list with breakouts or trough reversal flags! It only includes shares that advanced for the day and that also showed a price increase over the last 5 trading days. The list is sorted by "Volume Buzz". Good for detecting shares undergoing institutional buying or few large buyers. Generally speaking these shares have a high "Volume Buzz" and a low "Activity Buzz". Illiquid shares are excluded. The idea is that these shares qualify as candidates for at least 3 strategies so they should have "turbo-charged" odds of success! If you run this screen and don't see any yellow stars in the "MY SHARES" column then slap yourself on the wrist! The list is sorted by Market-Capitalization. List size will vary by market conditions. In a strong bull or bear market the list will be very small, but at or near major troughs it will start growing. Useful to see in a major correction which shares are leading out of the trough into the next run-up. The spark-line history charts of these shares should look terrible. In a strong upward move by the JSE it is always interesting to see the shares going counter-trend. It identifies shares of any liquidity, that had a sincerity score of 0 or 1 for quite a while and then suddenly have had this score rising to 3 or 4. This normally signals the end of a decline and beginning of a new up-leg for the share. This is of course when traders want to climb into the share to ride the up-leg. The last function buttons to discuss are the PATTERN buttons shown below: Clicking on any of these will reveal all the shares whose day price history has displayed a pattern similar to that shown on the button. The first button shows shares with a day price history displaying a U or V shape. The 2nd button shows shares that went more or less sideways for days and then went up in price. The last button shows shares that went up in price over the last days and then went sideways possible peak. A fair amount of programming goes into trying to pick out these patterns and we hope to add more over time but we are sure you will find these useful. Click on them and then observe the history spark-line charts of all the shares presented and smile as you see the patterns before you. It's not perfect and requires a lot of "fuzzy logic" in our algorithms but it is effective. You can further whittle down long lists by applying more filters before arriving at your shortlists. Also, you may want to develop your own routines to identify share candidates, rather than use our standard ones. Either way, it is important for you to learn how to do your own filtering within JSE. We will use the Liquidity indicator as an example to demonstrate filtering techniques and then perform a system examples of how to build your own screening routines. You can use the liquidity indicator to sort and filter in many different ways. The procedure is the same for the rest of the columns in the JSW sheet - just some menu items may change depending on the data. The diagram below shows what menu appears when you click your mouse cursor on the drop-down filter-box in cell R4. You can see some obvious options for sorting, but the filtering is actually the more useful function. Filtering hides all shares that don't fit the specified criteria and is therefore more suitable for whittling down a list to discover interesting share candidates. Filter by color We have highlighted "Filter by Color" which reveals the various circles you can select in another menu that appears to the right. The downside with this method is that you can only select ONE icon. Numbers filter Selecting this reveals a host of filtering options based on the underlying value in the cells, in this instance "number of trades in 10 days". Check-list filter This is new more useful for checking or un-checking text items such as JSE Sectors or individual share names, since the check-list is much smaller than that of individual numbers that might appear in system cells. However bear in mind the program only displays the universe of items that appear in the column and so quite often it can also be useful to use this to check off various numerical data as well. Most useful for the share names and sectors and for the SAFETY columns. In the example above for the Magic-Formula column, by un-checking the Blanks option you are instructing JSW to show you ALL the Magic Formula candidates. Alternatively, you could check only the 1's and 4's and un-check all the others to show you the TOP-5 Magic-Formula candidates in the TOP and TOP universes only green and black buttons only EXAMPLE SCREENS Here we go through a few exercises to show how we built the automated functions. LIQUID BULLISH-TREND WITH BREAKOUTS If we filter the JSE by shares that have a full-score for their TREND "T" in below image then we have about 81 shares qualifying. If we further filter the list to only show shares with green flags in "NEW HI", meaning they just made new highs, then the list plunges to only 27 shares! Further filtering out the illiquid shares those with a white circle in "LIQ 10d" meaning less than trades in the last 10 days reduces the list further to only 14 shares! The list appears below note the date - do not action any trades on this info! This could be an excellent early warning that the entire listed property sector is making a large trend move. Maybe time to invest in a PTXSPY ETF. The second thing to note is that most of these shares are on a high relative strength reading. The third thing to note is that there is a very large "volume-buzz" on DDT and OCT. With DDT there is definitely some institutional activity related to the buyout announcement. You want to know why jse market went down or up, especially if they are big moves. Because they point you to trends and themes among the investing psychology allowing you to jump onto them or defend against them if they are detrimental to your existing portfolio. Trading also give clues to institutional movement or general retail investor movement. The following "Leaders" screens are highly useful: The next thing is to filter out advances or declines depending if you are looking at UP or DOWN leaders. Assume we want to see UP leaders, to determine who is driving the market up with volume. Then simply filter column-A "DIR" to only show advances as shown below. You can either filter by color and select the green UP arrow or tick the selection box to only include cells with a value of "1". A value of "0" will only show unchanged shares and a value of "-1" will only show declining shares. By the now you will see the list on your page is very small. All that is required now is to sort the list by price change. It also has a activity buzz going on meaning widespread selling. Not a share we want to be going long on. It puts more power into your hands, with more up-to-date information, and consolidates various powerful quantitative tools we used to publish in various different jse on the trading site under one umbrella where all the information can be seen together. PVM and YIELD gives you a powerful valuation metric, to system you do not overpay for shares. The TREND Meter, FA and Sin-V trough flags gives you important information on the price action of the share and if now is the right timing for a purchase or short-sale. WE SUGGEST YOU NOW PROGRESS TO TUTORIAL 1 BELOW.
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But on the other side of it, politics can also be used for bad purposes and personal agendas.
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