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South Africa Top 40 IndexSouth Africa Top 40 IndexSouth Africa Top 40 Index

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SA40 trade ideas

What Makes a Trade – Unveil the pillars of profitable tradingTo trade well is nothing more than a calculated dance on the trading floor. You need to navigate the volatile seas of markets and understand the essential elements of a trade. And whether you’re a newbie or the MOST experienced trader out there, you need to adopt the same quintessential factors with your trading. And that is, the elements that make a trade. Let’s get into them… Position Size Imagine building a mansion without a blueprint. That’s what trading without considering position size feels like—chaotic and prone to collapse. The cornerstone of any robust trading strategy is for you to figure out the right amount of exposure to each position. It’s not just about the quantity of trades but the quality of each. You need to be precise in the position sizing with each trade. That is to maintain your risk and money management. That is to make sure you will only deposit a certain amount into your trade. And it is to ensure you have enough money to take on new and even higher probabilities of trades. Precision in position sizing is the silent architect behind the towering fortresses of successful traders. Entry: The art of timing of execution Whenever you enter into a market, 98% of the work is done. You have everything lined up according to the criteria, strategy and plan. You already have your idea on whether a market is likely to rally on up or fall off its horse. It’s not just about being in the market; it’s about being in the market at the right moment. Risk Level: Taming the market beast In the wilderness of financial markets, risk is the untamed beast that can either devour or be tamed. You need to be able to recognize the risk levels you’ll set to contain the beast. Where to place your stop loss The calculations of where you are NOT most likely to be hit Your risk per level and what you can stand to lose. Your risk level is your shield to protect from unexpected peril. You have to have all your calculations to lose a battle but NOT the war. Reward Level: Harvest your fruits Yes a MAJOR element to trading is RISK. But it’s also about reward, or else why would we be doing it? You need to meticulously set realistic reward levels that mirror the potential gains of a successful trade. Your reward must ALWAYS be more than your risk. You need to see the potential and likely future for the price to hit the take profit. Profit and Time Protection Levels: Safe-guard your winners and cut your losses Trading unfortunately is NOT always 100% mechanical. You need to safeguard your positions at times. What if the position becomes a non performing investment?’ And you’re losing daily interest? Well you need some type of time stop loss. This will get you out of your trade at a certain period so you can look for better positions. Worst case scenario you lose less than expected. Or you even bank a bit of profits as the trade remains in the money. FINAL WORDS: Trading is a game of calculated strategy and skill. But there are pillars of trading, you can’t avoid including: Position size, entry Risk level Reward level and Profit and time protection levels. These will help you form the bedrock upon which the palaces of prosperous trading are built. As you embark on your own trading odyssey, remember: mastery of these elements is not just a choice; it’s the key that unlocks the doors to financial triumph. So make sure you have these elements ready to execute to make a trade happen.
TVC:SA40Education
by Timonrosso
JSE TOP 40 potential big Diamond breakdown to 58,288Bearish Diamond formation is potentially forming on JSE Top 40. We've seen bearish tendencies for the market with momentum downside. Price<20 and Price<200 - HPT We DO need this price to break below the Diamond before the likelhood is higher for big downside. But knowing indices, they always tend to suprise and the market makes a big rally. ANyway, the momentum is down for now and if the diamon breaks below the next target could be at 58,288. Let's see
JSE:J200Short
by Timonrosso
How to trade the Fibonacci indicator in 2024Today, we’ll start with what Fibonacci is and how to use it to spot significant market turning points. Let’s start with... A short story about Fibonacci In 13th century Italy, lived a man named Leonardo Pisano – one of the greatest mathematicians of all time. Leonardo (also known as Fibonacci), learnt all about Arabic and Indian mathematics during his travels in North Africa and around the Mediterranean regions. Each time he travelled to a new place, he kept noticing a consistent pattern that repeated itself throughout nature. The sequence he defined was as follows. 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144… Basically, all you do is take the last two numbers and add them up to get the next number. 0 + 1 = 1 1 + 1 = 2 1 + 2 = 3 2 + 3 = 5 3 + 5 = 8 8 + 5 = 13 And so on… Fibonacci first contrived this pattern through a pair of breeding rabbits but he then saw this pattern throughout nature - in the breeding of honeybees , the shape of seashells as well as plants. This sequence also applies to trading and investing charts and is called the Fibonacci Retracement indicator. The Fibonacci Retracement indicator is used to help identify possible support and resistance levels for any market. The idea is all high liquid markets tend to move, to and retrace back, to certain levels after a big price move. The indicator is used to calculate the ratios and percentages using the Fibonacci sequence. Let’s look at an example with the South African JSE ALSI 40. Fibonacci on the JSE ALSI 40 Looking at the above daily chart of the JSE ALSI 40, you can see the index has fallen from a Swing High point of (100%) at 70,522 down to a Swing Low point (0%) to 65,386. On your platform, when you add the Fibonacci Retracement tool onto your chart, you'll drag it from the swing high to the swing low price of the uptrend to see six main horizontal fib lines present themselves: Fib line #1: 100% (Swing high) Fib line #2: 61.8% Fib line #3: 50% Fib line #4: 38.2% Fib line #5: 23.6% Fib line #6: 0% (Swing low) Traders use these lines to establish and identify supports (floor) and resistances (ceiling) levels. And with these levels you’ll be able to spot good entry, stop loss and take profit price levels. Once you draw the Swing High and Swing Low on the JSE ALSI 40, the Fibonacci lines will be plotted on the chart. You would also have seen the market then went to one of the high points at 61.80% at 68,560. The price then retraced back to the 23.6% level at 66,598. So you can see where we are going with this. As a reversal trader, you could have sold (gone short) the index around 68,560 and held it until it hit the 66,598 line at 23/6%. That’s where you would have banked a gain just by waiting for the market to bounce off a fib line. That’s a good introduction and a different way for you to trade and use the Fibonacci Retracement tool with your trading in 2024. Let me know if this was helpful!
TVC:SA40Education
by Timonrosso
1
7 Monopoly Lessons for TradersYou can learn a lot from the classic board game we all know and love: Monopoly. And as a trader, if you decide to play it again with your spouse or children – you’ll find the game to be very different. That’s because you have a better sense of risk, reward, probabilities and money management. You have the patience to grow a sizeable portfolio and eventually WIN! But before you do delve into your past, I want to share 7 important lessons I learned about trading from Monopoly. Hold Cash: The higher earner has the upper hand In Monopoly, the richer always has a stack of cash at the ready. Just like the Casino (where the house holds most of the money). And where the money is, is where the advantage lies. Similarly, in the trading arena, the money you have on hand is your golden ticket to seize profit opportunities. You know when they say, we are still counting our money? It’s because you have cash in hand rather than tied up in different assets. So with trading and with Monopoly, cash is king. You always need money to: Have funds to buy or sell more markets Be able to control your risk and money management Work on your Drawdown control methods Peace of mind you’re in it for the long haul No matter how many trades or positions I take, I always make sure to have at least 90% of cash in the portfolio at any one time. Be Patient: Not every roll is a winner Impatience is the enemy of traders. In Monopoly, you don’t win by making reckless moves at every turn. It’s about waiting for the right moment to strike. It’s about being patient to wait for the right property to buy and take advantage of. It’s about waiting for your opponent to land on your property for you to get paid. All in good time my friend., Apply the same philosophy to trading. The market will throw its share of doubles and snake eyes your way, but success lies in patience and strategic precision. You need to be patient for: The high probability trade to line up The markets to play out The drawdowns to end eventually Your portfolio to grow at a slow but steady rate Patience is EVERYTHING. Monopoly teaches us the value of holding onto our hard-earned cash. Similarly, in trading, preserving your capital is the name of the game. Avoid risky moves that could bankrupt your portfolio, and remember, sometimes the best move is not the flashiest one. Don’t blow on the most expensive stuff Just because Boardwalk has an expensive hotel doesn’t mean it’s the winning move. Similarly, the most expensive stocks or markets like Brent Crude or Indices like JSE ALSI 40 aren’t always the path to success. First, you might not have enough funds to accommodate the positions. Second, the markets might not have aligned perfectly to your strategy. Third, a high price market might be in a BUBBLE which is ready to pop. Fourth, it might be stressful putting in a large margin of funds to hold a more expensive stock i.e. Facebook, Berkshire Hathaway, Apple etc… Astute traders know that value can be found in unexpected places. You might find even better profit opportunities in other Blue Chip stocks that don’t even cost 1/10th of the price. Diversification and Opportunism: Building houses on every colour Monopoly teaches us the power of diversification. There are different properties with a variety of prices and conditions. You need to learn how to spread your investments wisely, and be opportunistic. Just as building houses on every color can secure your Monopoly victory, diversifying your portfolio across sectors, markets and positions can mitigate your risk and boost your chances of success. Strategic planning trumps luck I have to admit that, luck does play a role in both Monopoly and trading. It is luck to not roll the dice and land on “Go to Jail”. It is luck to not pick up a Chance card saying “You have to pay rates and taxes”. Same with trading. It is luck getting into a high probability trade and then the market actually playing out. It is luck being in a strong and favourable market environment for your trading system. It is luck having the market price shoot up past your take profit due to some external event. But trading and Monopoly are both very much strategic planning processes. You need to plan your moves carefully. You need to act on your moves, based on probabilities. You need to risk accordingly to not go bankrupt. You need a strong and well-thought-out trading plans. Conduct thorough analyses, and stick to disciplined strategies. And this is how strategy and luck will help you increase the chance of success. Negotiation mastery Monopoly is not just about rolling the dice; it’s about negotiation. You are playing against opponents of different advantages and styles. You need to learn how to negotiate, aid and help each other – before you beat them! I don’t know how else to explain this :D. Trading also involves striking deals. You’re hitting bids (when selling) and offers (when buying). You’re betting against your counterparty (investor, trader or market maker). You’re negotiating prices and moves. The choices you make will give you the significant edge and help streamline your profitable journey. Passive Income Key: Collect $200 as You Pass Go The exciting and genius of Monopoly lies in the sweet reward of $200 every time you pass Go. You know that feeling of waiting and playing your turns. Going through the good Chance cards and the Bad (going to jail). But when you are out and you pass Go, you can to collect your wage of $200. This is your special passive income secret weapon. You don’t just stick to what you have, you build on it and use what you newly have to grow your portfolio. The same works with trading. Each month, you receive a salary. And you spend, save and invest. So if you want to grow your trading portfolio using the compounding strategy, you might as well build on it. You might as well accelerate your trading journey. You might as well let your money work for you! Embrace the power of compounding, re-investing and depositing, and you might find yourself collecting much more than $200 as you navigate the trading board. Let’s sum up the Monopoly Lessons Traders Can learn: Hold Cash: The higher earner has the upper hand Be Patient: Not every roll is a winner Don’t blow on the most expensive stuff Diversification and Opportunism: Building houses on every colour Strategic planning trumps luck Negotiation mastery Passive Income Key: Collect $200 as You Pass Go FINAL WORDS: The trading board is yours – now go bankrupt the market, one strategic move at a time!
TVC:SA40Education
by Timonrosso
5 Important Trading Protection LevelsREMEMBER No matter what stock, index, Forex or other markets you’re trading, every trader needs 5 protection levels. Stop loss to stop yourself from furthering losses Time stop loss to get you out of non-performing trades Adjusted stop loss to lock in profits when the market moves in your favour. Risk % per trade to only lose a certain amount of your portfolio % of Drawdown before you HALT trading – when the market is not in a favourable environment to your strategy. Short and sweet but VERY powerful to apply to your trading. Do you have any other protection levels?
TVC:SA40Education
by Timonrosso
1
JSE ALSI 40 is a mess - Bearish bias to 63,460Yep, the JSE ALSI 40 is in yet another Twilight Zone. We see sideways motion, prior downtrend and there are sideways indicators. The bearish bias part of it is that price is below 200MA. The RSI is showing lower highs (Bearish divergence). We also see low volume on the buying side. More importantly, we have a flat monday with no conviction... And if the price does break below the Symmetrical Triangle, we could see downside in the week. The target could be very well to 63,460. Here is your weekly wrap up. The U.S. stock markets mostly closed higher, with a significant highlight being the S&P 500 surpassing the 5,000-point level for the first time. The growth was driven primarily by big tech companies and a variety of sectors including software, semiconductors, communications, media, regional banks, trucking, apparel retailers, auto suppliers, and Chinese tech stocks showing notable performance. Conversely, sectors such as real estate, energy, food & beverage, cruise lines, and casual diners lagged behind. Microsoft stood out by achieving a 1.6% rise in its shares, which boosted its market capitalization to $3.125 trillion, marking the highest valuation ever for an American company. Additionally, the yield on the 10-year Treasury note closed at 4.166%. In europe: In Europe, equity markets ended the day lower, with technology, media, and healthcare sectors leading the gains, while food & beverage, real estate, and utilities faced declines. General indices: Market performance indices closed as follows: S&P 500 up by 0.57%, Dow Jones Industrial Average down by 0.14%, Nasdaq up by 1.25%, FTSE 100 down by 0.30%, DAX down by 0.22%, and CAC 40 down by 0.24%. Asian markets Asian equity markets saw minimal activity, with most closed for the Lunar New Year holidays. However, there was a notable increase in holiday travel activity, with Xinhua reporting the addition of 1,873 passenger trains across the railway network on Friday. Markets such as Nikkei, Hang Seng, and Shanghai were closed, while the ASX 200 saw a modest increase of 0.19%. In South Africa In South Africa, the Johannesburg Stock Exchange (JSE) closed lower, primarily dragged down by the resources sector, which fell by more than 2% due to weaker metals prices. The precious metals and mining sector saw a decrease of 2.22%, although industrials managed a modest gain, supported by solid performances from companies like Bidvest, Naspers, and Richemont. The yield on the 10-year government bond closed at 9.955%. Thank you for reading and enjoying the daily wrap up and analyses we provide to Trading View for you!
JSE:J200Short
by Timonrosso
Are we in LAZY FEBRUARY traders? Q. "I heard that there is a phenomena called “Lazy February”. Could you explain why it’s called that and what I should watch out for as a trader?” A. I have not heard that term in eons! Here’s my 10 cents on how Lazy February got this name. Short month effect February is the shortest month of the year. And because so much happens in February, many investors like to play it safe and observe. Most investors tend to wait for March when the markets have chosen a direction, earnings are out, taxes are paid and they are ready to invest again. Year-end position squaring Traders often close out their positions at the end of the year right through to January. And this is for accounting, performance evaluation and tax purposes. This process is known as "position squaring”. But the big influencer is tax. Closing off the tax year In many countries, February is a time when individuals and corporations start preparing for tax filings. And this can influence investment decisions which can lead to either selling their positions or adjusting their portfolios for tax efficiency. After February and going into March, we should see a higher volume of buying and investing in the markets. Earnings season February is also known for major earnings releases – Especially in the U.S. Investors during this period prefer to watch and observe. This way they’ll be able to see the forecasts versus the actual results. Once the numbers are released, that’s where they’ll have more of an idea of what they want to invest in and what to buy or sell in March and the coming year.
TVC:SA40Education
by Timonrosso
1
JSE ALSI waiting for a direction to break out of The JSE ALSI 40 continues to move in some form of Symmetrical Triangle. And it's been doing so since September 2023. Right now the price is below the 200MA which does indicate a BEAR market. However, when you see the 200MA, it's been moving sideways, which does not give the indicator it's reliable signal for a trending motion. And with the price near the apex, means a breakout is imminent. If we look at the international markets like the Dow Jones and S&P500, they've hit all time highs. And as you know, the international markets are leading indicators which could mean we could see JSE ALSI breaking up and also heading to all time highs. The first target will be set to 73,637 and the next is the moon. So yes, my bias is bullish in Q1 - 12024
TVC:SA40Long
by Timonrosso
JSE ALSI 40 poised for upside this year - Target 84,298TECHNICALS Symmetrical Triangle has formed on the daily since I would say 10 August 2023. There are good technical signs that a breakout to the upside is imminent. First we have a long term upward range from 2020 which the price continues to bounce off the uptrend. Second we have a trending 200MA which the price still needs to break above as it's been in a pathetic sideways range for the last year. JSE traders know what I'm talking about. But once we get that breakout, we could see a target of 84,289 FUNDAMENTALS Index Rebalancing and Convergence There's a note on the JSE’s planned index harmonization which could affect the ALSI and Swix indices, aiming for a convergence by March 2024. INDEX PERFORMANCE This adjustment might influence the index's composition and performance, potentially affecting investor sentiment positively depending on the specifics of the harmonization. This can increase investor confidence in the index as a benchmark, potentially leading to more investment in products tied to the index, such as ETFs and mutual funds. BALANCE EXPOSURE! Also there could be better balance exposure across stocks or sectors, reducing volatility and appealing to risk-averse investors.
TVC:SA40Long
by Timonrosso
EXPLAINED: Odd Lot Offer EasilyWHAT IS AN ODD LOT OFFER? An odd-lot offer is a financial transaction. It is where a company offers to buy back small quantities of its shares from shareholders who hold fewer shares than the typical trading unit. Usually it’s under 100 shares. In the context of stock markets, an “odd lot” refers to a number of shares that is less than the standard trading lot. Here are the key points about an odd-lot offer: Target Audience: Aimed at shareholders who own fewer shares than the standard trading unit (commonly 100 shares). Purpose: Typically initiated by a company to reduce the number of small shareholders and simplify its shareholder structure. Offer Terms: The company specifies an offer price at which it is willing to buy back the odd lots of shares. This price may be at a premium to the current market price. Voluntary Participation: Shareholders are not obligated to participate; it’s a voluntary decision on their part. Cost Reduction: Companies may implement odd-lot offers to reduce administrative costs associated with managing a large number of small shareholders. Shareholder Choice: Odd-lot shareholders can decide whether to sell their shares to the company at the offered price or to retain their shares. Tax Implications: Companies may structure odd-lot offers in a way that has specific tax implications for shareholders. It’s common for the offer to be treated as a return of capital rather than a dividend. Approval Process: In many cases, such offers require approval from the company’s shareholders, often obtained at a general meeting. Let’s use an example with City Lodge in 2023. 1. What’s Going On: As of October 16, 2023, there were a bunch of small-scale shareholders in City Lodge, each holding fewer than 100 shares. These investrs are referred to as “Odd-lot Holders,” which make up 58.22% of all City Lodge shareholders. However, when you look at the total shares they own, it’s just a tiny 0.06% of the market. Now, managing these tiny portions costs a lot, creating a headache for everyone. 2. The solution To solve this issue, at City Lodge’s board of directors are suggesting an Odd-lot Offer. This means they want to buy back the small amounts of shares from these Odd-lot Holders, making life simpler for everyone involved. 3. So what do these Odd-lot holders get? If you’re one of these Odd-lot Holders, you get a chance to cash at a price that’s 5% more than the average value of City Lodge shares over the past 30 days. It’s like a special deal, and you won’t have to pay any fees to make the transaction. 4. How it works To make this happen, City Lodge needs approval from its shareholders. They discussed it at the Annual General Meeting on November 23, 2023. If the plan gets a green light, Odd-lot Holders can decide to sell their shares at the offered price or keep them. 5. The tax story They considered the Odd-lot Offer isn’t a dividend but more like a return of capital. This decision has some tax implications, so they suggest you chat with your tax expert for the details. City Lodge wants to simplify its shareholder list, and if you’re an Odd-lot Holder, you have a choice to make – take the deal or keep riding the City Lodge wave. Does that help and did it help you?
TVC:SA40Education
by Timonrosso
2
Oh no Mr Market not this shenanigan again! We've started off the year of 2024 the same way we started in November 2022. In a sideways range with a high of 75,000 and a low of 63,000. This is very disappointing and tough for position and swing traders who mainly focus on the JSE stocks. What can we do this year to help ride up and down the range? I can give some ideas but it's up to your trading personality and risk profile how to go about it. Some ideas are. 1. Lower your risk and reward price expectations. 2. Look into intraday trading the JSE ALSI 40 3. Make use of the trailing stop loss more 4. Risk less per trade when the market is really just volatile 5. Diversify into other markets and bite the bullets So, analysis wise I guess the JSE will want to go back to 75,000. Any trader can see a rectangle and guess the range movement for the year. What are your thoughts? What we really need is a breakthrough and a breakout.
TVC:SA40Long
by Timonrosso
Traders Don’t Fail – They QuitIt’s been a very tough year for swing traders. Go long the market drops. Go short the market rallies. Don’t do anything and you save from the burn. But in the bigger scheme of things, it looks like we are in an accumulation phase. The accumulation phase is a period in which smart money (informed and experienced traders or institutional investors) is believed to be accumulating a particular asset while it is still relatively undervalued. This phase occurs before a notable uptrend or bullish move in the market. Key characteristics of the accumulation phase include: Sideways Movement: Prices move within a trading range, often forming a base or a consolidation pattern. The range represents a period of equilibrium between buying and selling forces. You can see the JSE ALSI has been in a tight range this entire year. Decreasing Volume: Volume tends to decline during the accumulation phase, indicating a decrease in overall market activity. Lower volume signals that the asset is not attracting significant attention from the broader market. There have not been huge orders on the JSE ALSI like other years. It could be because there are LESS investors buying shares and more going into derivatives and margin trading. Or because they are worried about the state of the economy with load shedding, foreign direct investments pulling out, the country being rated down or people fleeing the country. Smart Money Accumulation: Informed traders or institutional investors quietly accumulate the asset during this phase. Their accumulation is not typically evident in the overall market activity due to the relatively low volume. Now with December, we could see investors piling into trades from their bonuses, offsetting taxes, preparing for the next year or with optimism with the festive season. Transition to Markup Phase: After a sufficient accumulation, there is an expectation that the asset’s price will break out of the trading range. This breakout marks the end of the accumulation phase and the beginning of the markup phase, characterized by a sustained uptrend. So, my hopes and bets are UP. I think once we break out above the range, we could see the JSE ALSI rally a good 10 -20%. But geez, we need strong catalysts to kick in. Even if it’s international markets helping us run up with Dual LIsted companies or America’s leading influence. What are your thoughts? You think we’ll get our long waited for rally? Traders and investors who stay in the game will reap the rewards. Patience is a trader's virtue. Impatience is the reason why traders quit. They don’t FAIL – THEY QUIT.
TVC:SA40Education
by Timonrosso
5 Non Trading Activities to Success…While charts, trends, risk and reward are our daily companions. Let’s not forget that life’s full of exciting opportunities beyond the trading desk. We are human at the end of the day. And you also need to consider extra elements that will help you propel towards success. Let’s get into the 5 Non trading activities you need to act on. Healthy Lifestyle: Trading, Eat, Rest, Gym, Repeat! Who said trading is all about staring at screens and analyzing numbers? It’s time to inject some energy into your life! A healthy lifestyle isn’t just about balance sheets; it’s about balance in everything. You need to take your vitamins, eat healthy, feel great, hit the gym, go for a run, or channel your inner yogi. The adrenaline rush from trading pairs perfectly with the endorphin high from a good workout. The healthier you are, the more sharp your mind will be. And this will get you to think straight and control your emotions better. Besides, you are what you eat and what you do. Mindful Meditation: Zen and the Art of Trading Mindful meditation isn’t just sitting and going OOOHHM…. It’s for all successful entrepreneurs that deal with daily stresses and risks. Sometimes you just need to take a breather, clear your mind, and get your mind and thoughts in order. Whether you meditate, do self-hypnosis or just do deep breathing exercises – this will help you to be a more calmer and clearer thinker as a trader. When you find your inner peace in your mind, it will reflect on your trading and results. Continuous Learning Trading is an ever-evolving game, and the most successful players never stop learning. I’ve read maybe 200 books on trading in my life and I don’t even think that’s nearly enough to learn everything about the markets. It’s always crucial for you to dive into new strategies, explore market trends, and devour financial news like it’s the hottest gossip in town. You need to find yourself in the trading journey. This is a self introspection adventure that is forever going. Stay curious, stay hungry for knowledge, and watch your trading game reach new heights. Strong Networking: Bulls, Bears, and Bros Trading might be a solitary endeavor,. But success is a team sport. It’s important to build a network that’s as strong as your risk management skills. Sign up to trading events, courses, books and programmes. Connect with fellow traders, and remember, it’s not just about what you know; it’s about who you know. Your next big opportunity might come from a conversation over coffee rather than a chart analysis session. Time Management: Trade Like a Pro, Live Like a Boss In the world of trading, time is money. But beyond the trading hours, master the art of time management in your personal life. Schedule downtime, enjoy hobbies, and spend quality time with loved ones. A well-balanced life isn’t just about maximizing profits; it’s about maximizing joy. Efficient time management is the key to becoming a trading rockstar without burning out. So, trade smart, live well, and let success be your favorite trend! FINAL WORDS: I trust this has given some food for thought. That trading isn’t just about technical work. It’s also about inner work. Work on yourself and become the true trader you aspire to. Let’s sum up the 5 Non Trading Activities to achieve better success. Healthy Lifestyle: Trading, Eat, Rest, Gym, Repeat! Mindful Meditation: Zen and the Art of Trading Continuous Learning Strong Networking: Bulls, Bears, and Bros Time Management: Trade Like a Pro, Live Like a Boss
TVC:SA40Education
by Timonrosso
Why Markets Will Always Change – 9 ReasonsThe only thing constant about financial markets is that they change. And since 2007 or so, with the higher availability of trading different instruments and markets world-wide. And not to mention, the ability to go long (buy) and go short (sell). Yes, these everyday possibilities were difficult to find and trade back then. Now I’m speaking my age in the markets. But it’s important to know, the algorithms are changing the game every single year. As long as you’re a trader you need to be able to learn, grow, adapt and evolve with every changing markets. Let’s go into details about WHY the markets are changing… New and Old Traders (Volume and liquidity) Traders are the lifeblood of financial markets. They come in all shades of experience, net worth, strategies and diversity. Each new trader and investor, brings fresh perspectives, risk appetites, and systems. And when they execute, it causes a ripple into the market ecosystem. Similar to the ‘Butter-fly effect’ where one tiny flutter of the wing can cause weather disturbances which could result in a hurricane. This blend of old and new creates a constant state of flux, volume, liquidity and adds their unique touch to the market canvas. New Market Information (Local or international) Information is the bedrock of trading decisions. In today’s hyperconnected world, news, data releases, and geopolitical events can instantaneously ripple through markets. Whether it’s an unexpected earnings report, a geopolitical crisis, FOMC or Central Banks decisions, or a technological breakthrough (like AI). This new information triggers a financial market reaction. New Micro, Macro, and Fundamentals (Unrelated to charts and price) Microeconomic factors include things like: individual company performance. Also think of corporate actions such as mergers and acquisitions. These will also reshape industry landscapes and impact stock prices. Fundamentals include any internal news related or announcement event that is NOT related to price and volume action on a chart. While macroeconomic indicators include: GDP growth with money tightening and injection controls. While Central banks’ decisions on interest rates, inflation rates and monetary policies influence borrowing costs, investment decisions, and market valuations. These also play a pivotal role in market dynamics. As these factors evolve over time, they influence market sentiment (how investors feel on what to buy and sell) And this obviously drives price movements. World Economic Info (Major changes happening) Globalization has interconnected economies in ways unimaginable just a few decades ago. On the one hand we have 6 more countries joining BRICs. Which is showing the political war and dynamic change between the East and the West. Economic trends in one part of the world can have far-reaching effects elsewhere. Trade agreements, currency fluctuations and Forex wars, and shifts in supply chains impact various sectors and industries. And this can also lead to a change in market price, volume and conditions. Also, when one event kicks in there is a domino effect. And this can trigger a cascade of events that reverberate across financial markets worldwide. Sentiment (How the overall feeling is) Psychological factors like fear, greed, and uncertainty can drive sudden market movements. Market sentiment is often reflected in buying and selling volumes. When investors and traders are feeling optimistic and positive – they buy and hold. When they are feeling down and negative (about positions) – they sell and short. High volume with buying or selling can indicate strong conviction – for other investors. While low volume might signify uncertainty. This ebb and flow of market participation led to constant changes in market trends and patterns. Then there are other reasons that financial markets are constantly changing including: Technological Advancements (At an accelerating rate) As the world evolves and technology compounds at unprecedented levels, we will see innovations in: Trading platforms Algorithms new instruments & markets high-frequency trading New AI related trading bots Better chart pattern recognition plugins Improved automatic trading developments. And emerging technologies can change existing business models in a way they can make them obsolete to totally transform them. These will all influence market behaviour of demand and supply with investors and traders. Which will cause a shift and change in price and volume. Regulatory Changes (Boring but inevitable) Also, rules. Rules, regs and legs are always updating and changing. This will also alter trading practices, liquidity, price movement and market structure. Political Uncertainty (Fun times ahead for the world) The rate the world is separating and joining forces in all different ways, there is change coming to the financial markets. With the EU having control over 27 countries economies. With BRICs adding another 6 countries to theirs. With other countries breaking away from the US dollar. While other companies and countries are switching and adopting more to crypto and AI. The very foundation of politics and control is changing under our very eyes. And this will definitely have a major shift in economic directions as well as on the markets. Natural Disasters and health disasters (Brace yourself and keep your masks) From Global Warming, to less resources available to mind. From catastrophic events, floods and droughts. These can all disrupt supply chains, impact production, and affect the prices of commodities and goods. And then financial markets and prices, will all be affected. And what about pandemics? If we have another COVID-19 type event, this will once again create rapid shifts in consumer behaviour. And this will have a major impact and ripple throughout companies, industries, countries and essentially the world markets. FINAL WORDS: You can clearly see, why financial markets will always change. And as markets continue to shift and adapt, the only constant is change itself. So it’s our job to adapt or die. Embrace it, learn from it, love it and enjoy the process along the way. It means, this journey and income generating source will NEVER get boring. It can ONLY get better (well we can be optimistic to think that). Let’s sum up why the financial markets landscape will always change… New and Old Traders (Volume and liquidity) New Market Information (Local or international) New Micro, Macro, and Fundamentals (Unrelated to charts and price) World Economic Info (Major changes happening) Sentiment (How the overall feeling is) Technological Advancements (At an accelerating rate) Regulatory Changes (Boring but inevitable) Political Uncertainty (Fun times ahead for the world) Natural Disasters and health disasters (Brace yourself and keep your masks)
TVC:SA40Education
by Timonrosso
WHAT ARE Fakeouts, Shakeouts and Whipsaws?YOUR QUESTION ANSWERED! What on earth are Fake outs, Shake outs and Whipsaws? After this you will know… Fake-out: (When the price makes a false breakout of a chart pattern) A fake-out occurs when the price of a market appears to break out of a certain chart pattern. This could be a trendline, support, or resistance level. But then quickly reverses and retreats back within the pattern. Shake-out: (Where the market is highly volatile and the price moves to levels that hits their stop losses and gets traders out of their trades) A shake-out is a scenario where the market becomes highly volatile and the price moves rapidly to levels that trigger the stop-loss orders of many traders. Stop-loss orders are pre-set risk levels at which traders automatically exit their positions to limit their losses. A shake-out is designed to “shake out” weak or inexperienced traders from the market. When stop-loss orders are triggered, it can create a temporary spike in the opposite direction of the prevailing trend. Once these traders are “shaken out,” the market might resume its original trend. You’ll see this most commonly with low liquid, high volatile markets like Penny Stocks or Penny Cryptos. Whipsaw: (This is where the market will change its most prominent direction within the day). Whipsaw refers to a situation where the market quickly changes its direction within a relatively short period, often during a single trading day. This can cause confusion and losses for traders who are caught off-guard. Whipsaws can occur due to various factors, such as sudden news releases, economic data surprises, or changes in sentiment. They are characterized by sharp price movements that can make it difficult to make accurate trading decisions. Whipsaws are especially common during periods of high market uncertainty or when there’s a lack of a clear trend. Let’s create a quick summary of the three: Fake-out: (When the price makes a false breakout of a chart pattern) Shake-out: (where the market is highly volatile and the price moves to levels that hits their stop losses and gets traders out of their trades) Whipsaw: (This is where the market will change its most prominent direction within the day). If you have any trading question let me know in the comments
TVC:SA40Education
by Timonrosso
#TOP40 South Africa 40 finds support@ trendline + Horizontal supNote how the trendline that has formed has had its 3rd successive touch with a reversal candlestick. Each turn off support has created strong upside price action the following day. The level where the top40 found support is even more significant as the 67500 has been a massive change of polarity on many occasions through the second half of 2023. The bulls have their work cut out for them as the failure to hold price above the 200dma was not a positive development. However in the short term, i think we can retest 69300 and maybe 70 000 but ultimately a close and successive days of trading above 70k is needed for bulls to sustain momentum and drive the market higher.
JSE:J200Long
by MarcoOlevano
SANTA CLAUS Rally in 2023 for JSE ALSI 40?Will we have a Santa Claus rally this year? Statistics say, it is likely but let's start from the beginning... The Santa Claus rally is when stock prices, both locally and globally, tend to go up and end the year on a positive note. Now, why does this happen? Here are some ideas: Holiday Cheer: During the holiday season, people generally feel more optimistic and positive. The festive mood can rub off on investors, making them look at the market with a brighter outlook. Positivity often leads to more buying, which helps the rally. Tax Time: Toward the end of the year, investors and fund managers review their portfolios for tax purposes. This is when you'll see them selling stocks to get some tax benefits. Once they sell, they use the money to buy other stocks, thinking those will do well in the coming year. This buying spree lifts stock prices and pushes up market indices. Bonus Spending: Investors often use their year-end bonuses to buy stocks. More buying means higher demand, and you know what that does – stocks go up! While it's a bit speculative, nothing says Santa Claus Rally like charts showing off holiday cheer. The JSE has seen gains in 14 out of 20 Decembers! Take a look at the JSE-ALSI stock market chart since 2003. Each December is marked with a vertical blue line, showing how it performed: That's a 70% win rate with positive gains in 14 out of 20 Decembers, accumulating a total of 38.72% gains. So, chances are, buying this Christmas might be a good idea, especially after a sideways year for the JSE ALSI.
TVC:SA40
by Timonrosso
5 TRADING PROTECTION LEVELS - NB*REMEMBER Every trader needs 5 protection levels. Stop loss to stop yourself from furthering losses Time stop loss to get you out of non-performing trades Adjusted stop loss to lock in profits when the market moves in your favour. Risk % per trade to only lose a certain amount of your portfolio % of Drawdown before you HALT trading - when the market is not in a favourable environment to your strategy. These are the control factors to manage your portfolio with better direction and management. What other protection levels do you apply?
TVC:SA40Education
by Timonrosso