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A mechanical trend-following trading system based on Price Momentum signals, specifically the 20 and 55 Day Highs. In , commodities trader Richard Dennis bet with his business partner Bill.

The group managed to contain internal food inflation at 4. Meanwhile, the group continues to buy into its geographical distribution across Africa, has managed to open new stores and increase its employment base. This all signals a very healthy company which has a proven ability to weather a negative financial forecast and maintain Shoprite share price and dividends. The live online stocks chart shows a stable Shoprite share price for the past five years. Investors who purchase Shoprite shares will most likely see good long-term returns on investment.

We have made it simple to buy JSE listed firm shares online. Next , one of our experienced and certified stock brokers will personally get in contact with you to discuss your custom stock request. Other financial press that you may also consider reading would be the weekly publications such as the Financial Mail and Fin Week. Skim through the newspaper, for example, and look at the headlines for 'bad news. Would any of these companies be recovery situations?

A word of caution though: Be selective when choosing the resources you use. PSG Securities Ltd website , as well as many other local financial websites, including www. Alternatively, focus on the sectors and individual shares of personal interest to you i. For example, if you are an engineer, then focus on the engineering sector. If you are a medical doctor, then focus on the healthcare and pharmaceutical sectors.

With whom do you bank with and who are you insurers? There are reasons why you like them. Once again, you have to do a lot of reading but smart reading! This fundamental analysis method means the keeping of a financial diary, in which you would record the financial year-ends of all the companies that may interest you.

It is suggested that a bi-annual book like the JSE Digest from Profile Media would be useful in providing this information. You would then anticipate what their financial results would be by first looking at their past five year performances and then estimate what the results would be like within the current economic climate. Would it be "good" or "better than expected"?

If you anticipate good results and you believe that the market in general has not picked up on this yet, then you would get in now before the "crowd". Remember, the financial results are usually only printed in the financial press two to three months after their financial year end. This gives you that short window of opportunity to make some money fast!

Alternatively, we suggest that you use the research facilities available on the PSG Securities Ltd website such as the Value and Quality Filter, which saves a lot of time. The Filters help to narrow down the choice by using 12 fundamental search criteria. The Company Analysis is a one page research document on every financial and industrial share, as well as some selected resource and mining companies, which provides all the pertinent research information an investor would require to making well-informed investment decisions.

The technical analysis method of prospecting for shares involves the "scrolling" through of charts using various technical analysis indicators to find shares that are "oversold" or presenting a buying opportunity. This could be very time consuming! The Wen Professional Plus charting software will help you track the market, as well as the shares that you may be interested in.

You would select the Hi-Liter criteria and "scan" a list of shares, looking for shares that will meet your specific technical criteria. A list of results will then be produced, which will need further analysis and visual confirmation. Using the four methods as discussed above, you may come up with a list of interesting-looking shares for further investigation. You may have decided on some shares using the Top-Down Method, some from reading the financial press, some using the fundamental analysis method and some using the technical analysis method.

It is this group of shares that you are now going to add into your own watch list. You can either add shares to this Default watch list or create a second watch list Step 2. Click on the "ADD" button Step 3 to create a new watch list.

Next, you will need to add the shares to your watch list where you will need to know the share codes. If you do not know the share codes, select the "T" in the top-right hand corner to take you to the Code Finder. After entering the share code, click the "ADD" button Step 4.

The watch list shows which shares are moving up or down, compared to the previous day. Between your three watch lists, you will see where the market activity is. Once you have formulated an opinion on the general economy i. As mentioned earlier, the Value Investor is a very powerful tool for investors to enable them to make informed decisions.

The watch list changes to show the relative financial ratios. You can then select the individual columns to "rank" the criteria in either ascending or descending order. This enables the investor to then focus on the best possible options. For example, you may only be interested in those shares that are undervalued and profitable and have manageable financial risk, while also paying a healthy dividend.

The watch list, for example, has then been ranked in ascending order based on the PEG ratio. Step 1 was to narrow down the choice and create an initial watch list or three of interesting—looking shares. By now you have narrowed your down your choice of shares and have included them into your own watch list on the PSG Securities Ltd website. Now you need to do some share market analysis and this is where the homework comes in! Share analysis consists of the two schools of thought, namely: Dividends must be declared approved by a company's Board of Directors each time they are paid.

For listed companies, there are five important dates to remember regarding dividends. Fundamental analysis addresses the question of "What share to buy". It is concerned primarily with analysing the future profitability of the company. Step two will focus on the fundamental analysis part of share market analysis. When we talk about macro fundamentals, we mean how does the company operate within the economy? If the economy is doing well, then the industry should be doing well.

If the industry is doing well, then the individual sectors should also be doing well and hence the companies and the share price. In other words, you want to see growth in the economy. Share Info Pages From your watch list Step 1 , select the share code Step 2 of the company that you want to analyse further.

Here you will find all the information that will help you make a better, informed decision. You will see today's statistics and how the share has performed compared to the previous day's close. You will see the bids and offers for the share, as well as the intra-day chart. Now you need to zoom-in on the individual companies in your own watch list. Ideally you would get hold of their latest annual financial statements, which includes the Balance Sheet, the Income Statement, as well as the Cash flow Statement.

The quickest way to get hold of these documents is to visit the individual company's website, find the Investor Centre, and then download the latest financial statements in PDF format. Next, it is about understanding ratio analysis. The most important financial ratios to analyse is not EPS growth, but rather the following:. From the Company Analysis page, you will have a better idea of the nature of business, a comment on the latest financial results, as well as the company's prospects going forward and a recommendation.

This is useful in that it helps the investor get to know the company better, as well as fine-tune their watch lists further by removing unfavourable shares. At this stage, you just want to have a "preliminary fundamental checklist", which will help you decide whether the share in your own watch list merits further analysis.

Step 2 should have provided you with a list of Fundamental Analysis checks which by completing this 'checklist' will ensure that you are able to identify and separate good undervalued shares from overvalued and under performing shares! Apply the Fundamental Analysis Checks to the shares in your initial watch list. Technical Analysis serves to determine "when to buy or when to sell" shares. It is concerned with the use of graphs to study historical price and volume patterns in order to predict the future course of share prices.

It determines the ' optimum time to buy and sell shares ' as opposed to the "intrinsic value' of shares. Technical Analysis discounts fundamental factors and these fundamentals are reflected in the price and volume. Price is determined by supply and demand, while volume is determined by commitment to supply and demand. Price and volume form trends and these trends form patterns.

The analyst's job is to identify these patterns for future buying and selling opportunities. The key assumption upon which technical analysis is based is that the sum of everything that everyone knows or feels about a share, sector or market is reflected in the price and volume. Prices move when there is a change in the feeling or when new knowledge becomes available.

Technical analysis is the study of the share's price and volume chart to search for historical patterns which may help to predict the future price patterns. Share prices move in a series of peaks and troughs.

The direction of those peaks and troughs determine the direction or "trend" of the market. There are three kinds of trend, namely:. While there are three trends, there are only two kinds of market. The share market is always either in a trending market i.

A third of the time the market is moving sideways in what is called a consolidation period. The Primary or Main Cycle generally lasts between 1 and 2 years and is a reflection of investors' attitudes toward the unfolding fundamentals in the business cycle. The Secondary or Intermediate Cycle is countercyclical trends within the confines of the primary cycle trend. These secondary cycles are more commonly known as 'corrections' within an uptrend and as 'rallies' within a downtrend.

They last anywhere from 3-weeks to as long as 6-months or more. The Minor or Short-term Cycle, which last from 1 to 3 or 4-weeks, interrupts the course of the secondary cycle, just as the secondary cycle trend interrupts the primary cycle trend.

These minor cycles or daily fluctuations are usually influenced by random news events and are far more difficult to identify than their secondary or primary counterparts. Generally speaking, the longer the time span of the trend, the easier it is to identify. Over the years, technicians have devised a number of different ways of physically representing market data on charts. The most popular charts are the closing line chart and the bar chart.

The interpretation of the bar chart is based on chart formations and the relationship between price and volume. These charts are used mainly for jobbing or short-term speculating.

They also highlight chart patterns, which are of a much shorter-term nature e. Use a day moving average to help you establish whether you have a bull market i. Should the price be above the day moving average, the trend is upwards or bullish and should the price be below the moving average, we have a bearish or downwards trend.

Use another two different shorter-term moving average time periods; the longer period for the trend, while the shorter period as a trigger. Once you have established whether the current market is a 'trending' or ' trading market ' and where the market is now compared to the primary, secondary cycles and short-term daily fluctuations, then you consider getting your timing right. Moving averages are very basic tools and they are your starting point when it comes to technical indicators.

Relative Strength analysis is often used to compare a share or sector's performance with a market index. It is also useful in developing spreads i.

Step 3 would have provided you with a more in-depth understanding of how to use technical analysis indicators to assist you to buy and sell shares at the right time! Compile graphs using the technical analysis indicators you have learned to the shares in your watchlist. What is portfolio management?

Portfolio management is important as it means getting the maximum from one's share investments. Remember, you main goal is to maximise wealth by maximising returns i.

It can be expected that these will be extended to tie in with certain overseas markets. Portfolio strategy - You need to decide if you are an investor or a trader? If you are more the conservative type investor or have a longer-term outlook, then you may consider the buy and hold strategy to investing on the share market.

Buy and hold strategy - The objective is to develop your investment portfolio and only make adjustments when absolutely necessary. This strategy is often the most sensible and least risky strategy to choose.

The medium to long term buy and hold strategy will almost always outpace inflation. If you are more the aggressive-type investor or have a much shorter term outlook, then you may consider the swing trading strategy or even shorter jobbing strategy. Swing trading strategy - This is a more leisurely version of jobbing, where the objective is to climb in at the bottom and jump off at the top.

Timing is the critical success factor. Jobbing strategy - Jobbing is enjoyed by bold speculators who seek excitement. It is a process of jumping in and out of shares and taking advantage of very small price movements.

Jobbing requires an active ear to the ground, an in-depth knowledge of the share market and takes up more time. Here you have to be careful from a tax point of view as you may be classified as a share dealer and be taxed accordingly. People invest in the share market because of the potential for high returns, but this comes at a price. This price is the higher risk associated with share market investments compared with, for example a fixed deposit with a bank.

To reduce risk, one basic principle of portfolio management is diversification. Diversification means to spread your capital among different shares and industries. By doing this, one reduces the risk of losing money if things should go wrong with a particular share or shares.

Portfolio structuring is similar to diversification, but instead of spreading holdings across market sectors, you diversify your portfolio in terms of quality and time frame. The classic traditional portfolio consists of a well-balanced selection of "blue- chip" shares that are held indefinitely.

This tends to minimize risk, but does not allow for exceptional returns. Portfolio structuring attempts to improve the return on a portfolio, without increasing the risk. The biggest enemy in the share market is human emotion i.

The biggest challenge to you, as an investor, is to remain objective. One way to eliminate human emotion is to apply a stop loss strategy. Just as a seat belt is there to protect you in your car in the event of an accident, so does the stop loss strategy attempt to protect you, the investor, from the unexpected.

When it comes to successful share market investment, it is not so much a story of capital gains that is important, but rather one of avoiding capital losses. The major function of a stop loss strategy is to limit your losses to a pre-determined amount.

This is an essential tool for traders, speculators or short-term investors. Most successful long-term investors snub the use of stop loss strategies, as they rather limit their downside risk by proper diversification and detailed fundamental research. However, traders normally lack any wide diversification as well as detailed fundamental research and therefore need some other method of safeguarding their capital. A successful trader has to have an extremely strict selling discipline.

A long-term investor can be right at the wrong time if he has patience. A trader who's right at the wrong time, however, is not a trader for very long.

Traders that see a share fall and then decide to hang on to the share, pretty soon lose their capital. A good trader is an opportunist who risks his capital with the object of making a large profit within a small period of time.

If the position turns against him he should cut his losses or take his profits immediately and move onto to another position. He cannot afford to base his future on the vague hope that he will be proven right and the share will recover at some later stage. A trader cannot afford to have his capital locked into a position that is not working for him, this capital should reallocated to a more profitable position.

A stop loss strategy automatically fulfils this function. If the share price now falls to cps or below, the trader should immediately give an order to sell the shares at the specified price. The same applies when the share price has moved higher to cps.

The stop loss order will be trigger when it reaches cps. In this manner is able not only to limit his losses but also to lock in profits. This is a strategy that every trader should consider to ensure his longevity in a sometimes very volatile market.

Step 4 would have provided you with knowledge on how to build a diverse portfolio whilst managing your risks. Apply the portfolio management checklist to your portfolio management checklist to your "prospect" watch list i. Essentially all of these steps together from the foundation for any good investment strategy.

The more you are able to apply and put into practice using these investment methods you will be able to make more informed trading decisions. Ultimately, the more time you spend on mastering these steps the more likely you are to be successful and profitable in your wealth creation endeavours. So why trade on the simulator? Well, it beats losing real money and we want you to make lots of it.

You trade on the simulator to learn how to place your trades on the trading platform. You also trade on the simulator to learn and to develop good trading habits. You gain confidence in your stock-picking abilities.

You can test your ideas and techniques in a risk-free trading environment. You will learn how to read your charts, how to read the markets, how to find chart patterns, what to avoid, what to look for and most importantly, you learn to trust your judgement.

The idea is to get a record of accomplishment going in your simulated trading before doing the real thing. Fitch Solutions Macro Research revised down its growth forecast from 1. Gauteng radio station Hot Designed by Sir Herbert Baker in , the Heritage-listed property is meticulously preserved and was last renovated in While pseudonyms are sometimes acceptable, correspondents should sign letters and provide a name, street address and daytime contact number.

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