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>>>THIS IS TUTORIAL #1 <<<


ShareTrader is a quantitative JSE share/ETF trading decision support system (DSS) for short-term traders, medium-term traders and long-term investors alike. It consists of a suite of tools embedded in our JSE Share Watchlist (JSW) and allows for the automatic identification of which JSE shares are currently "ripe" for purchase, using our trough-reversal, trend reversal and breakout algorithms. Once a trade has been made, the system will also provide SELL signals based on various trade-horizons thresholds set by the trader.

Built-in money management suggests the proper trade size together with associated stops depending on trading capital available, current market risk and various other personal elements selected by the trader such as maximum risk per trade, brokerage, slippage allowance etc. All stops are derived from known support levels of the share in question.

Using ShareTrader, a trader could accumulate portfolios of short, medium and long term trades of various sizes and execute a mechanical trading strategy regime throughout the course of time. Assuming a trader wishes to run a short-term trading portfolio of 10 shares, then he/she would accumulate shares over time as BUY signals become made available until 10 shares had been purchased. The purchases can be via straight equities or CFD's or SSF's.

When SELL signals are encountered in ShareTrader, the relevant share is sold and its vacant spot filled up with another opportunity that flashes a BUY signal. ShareTrader uses various proprietary as well as internationally recognized proven methods to issue BUY/SELL signals.

Buy signals are categorized into five types, namely:
B1. Trough Reversals - a share making a recovery from an extended decline
B2. Trend Reversals - a share making a sudden trend change or acceleration
B3. Breakouts - a share breaking-out through a major resistance level
B4. Support Pivot points - a share bouncing off support lines (successful tests of support)
B5. Moving average cross-ups (bullish cross-overs)

Sell signals are categorized into four classes, namely:
S1. Moving average cross-downs (bearish cross-overs)
S2. Price Breadth deterioration (demand weakness and exhaustion)
S3. Breakdowns of major support levels
S4. Resistance Pivot points - a share bouncing off a resistance line (failed resistance test)

ShareTrader saves busy private investors and traders huge amounts of time by continuously scanning the JSE each day for high-confidence opportunities using tests for all of the above and presenting them as a single list. These lists are rarely more than 15 shares on any given day. Depending on the trader/investors' risk appetite and experience, this list can be further filtered to eliminate illiquid shares or shares below a certain market-capitalization. JSW also provides further fundamental safety mechanisms for longer term investors, such as the share's financial health etc. In addition the trader can elect to only see those opportunities that have multiple buying signals (for example a trough reversal combined with a resistance breakout). Invariably the list gets whittled down to 5 or less high-confidence candidates within 10 minutes of work - something that would normally take days of research!

For the very busy trader or beginner, ShareTrader also comes with a nightly email recommending various shares hand-picked by our analysts that are displaying high probability trough, reversal and breakout characteristics.

TRADE HORIZONS
For the sell signals S1,S3 & S4 the trader elects to use short, medium or longer-term thresholds that are provided in order to govern the required frequency of trading and associated risk. For example, for an aggressive short-term trading regime, 10-day moving averages and support levels may be selected. But for a less aggressive regime, more suited to those trading part-time or as a hobby, 20-day or 40-day moving averages and support levels will be the preferred choice to ensure longer trades and less frequency of trading. Alternatively, if the trader prefers a mix of long-term investments, medium and short term trades then a combination of the above will be used.

The tools provided to govern entries and exits are embedded into our flagship JSE Share Watchlist (JSW) product to ensure one complete package for investing, fundamentals analysis and trading. You can read a detailed tutorial on the functionality of the JSE Share Watchlist over HERE. The sections below focuses on the ShareTrader specifics of JSW.

SHARETRADER TRADING TOOLS
As we noted above, the ShareTrader tools are but 40% of the overall functionality provided by our JSW system. There are indeed various other tools in JSW that a trader might find very useful in his decision process, such as the BUZZ meter and the fundamental SAFETY metrics, but we are now going to focus on the specific technical tools to empower short term trading BUY and SELL decisions. The relevant columns in JSW are shown below (note some JSW columns not associated with ShareTrader have been hidden to fit the image on the page).

The above is a typical list after pressing the TROUGH function button to scan the JSE and present opportunities. The first column is the price column. This columns' heading is colored in GREEN (the overall market conditions are SAFE), ORANGE(the market may be approaching a peak or still trying to form the base of a trough - CAUTION) or RED (overall market conditions are dangerous as the JSE is falling). Now there are always individual shares that run counter-trend to the overall market, but they are always the minority, so you are encouraged to take heed of this MARKET SAFETY indicator when trading. Remember, the overall market is like a tide which floats or sinks all boats. If the indicator is green, its safe to trade. If its orange you must exercise caution and stick to high confidence trades only. If it is red, you should consider shorting trades only.

After the price column, there is a Market-capitalization and liquidity filter to further eliminate candidates. For example if you're trading with R100,000 per trade, its prudent to select liquid stocks that can bear your selling when the time comes without damaging the sell-price when you offload your shares!

MA TREND
This shows you the status of the relationship between the share and its 10 and 20-day simple moving averages (in columns "10" and "20".) A green tick means the share is trading above the relevant average. A yellow exclamation mark tells you the share crossed-up through the relevant moving average in the last 3 days (to ensure you get alerted early and not too late into the trade). A red cross means the share dropped-under the relevant moving average in the last 3 days).

The "X" column shows the relationship between the 10-day and 20-day moving average. In other words, a tick means the 10-day is above the 20-day (healthy up-trend in place). An exclamation mark means the 10-day crossed up through the 20-day within the last 3 days (buy signal). A red cross means the 10-day crossed down under the 20-day within the last 3 days (sell signal).

The "T" column summarizes the whole moving averages trend with a signal strength from 0 to 4. Three green ticks means a strong upward trend and gives a full signal strength.

DONCHIAN
This is a very important and powerful set of indicators and shows you the status of the relationship between the share and its 10, 20 and 40-day support and resistance levels.

These are measured by Donchian Channels, as used by the famous Turtle Traders in 1972. Shares breaking through resistance levels are a bullish BUY sign and those falling below support levels are a bearish SELL sign. Shares bouncing off these levels are turning on important PIVOT POINTS which  themselves are also BUY and SELL signals.

The sensitivity of the BUY and SELL signals decreases with increasing time-spans. A share is much more likely to break its 10 day support line than its 20-day or 40-day support line for example. However, breaks for the longer time-spans are more bearish/bullish than breaks for the shorter time spans since they are obviously more significant events.

1. A green up-arrow shows the share has just broken through the respective resistance level, and is a BUY signal. The share is making new highs. Most successful traders enter trades on new highs. CLICKS in the above picture just broke through its 10-day resistance level.

2. An upward slanted yellow arrow is a RESISTANCE PIVOT and shows the share is within 0,5% of the respective resistance level, either by approaching it (warning us the resistance is about to be tested) or by having bounced off it (the resistance was successfully tested - a possible SELL or SHORT signal) BUILDWK in the above picture is such an example for its 10-day resistance level.

3. A red down-arrow shows the share has just fallen through the respective support level and is a SELL signal. Failure of a support level normally leads to further declines and the longer the measurement period (i.e 40 days instead of 10 days) the more serious the implications. BSS in the above picture has just dropped below its 10 and 20 day support levels, a rather bearish signal.

4. A downward slanted yellow arrow is a SUPPORT PIVOT and shows the share is within 0,5% of the respective support level, either by approaching it (warning us support is about to be tested and we may have to get ready to sell) or by having bounced off it (the support was successfully tested - we can breathe again or pyramid up and buy some more shares.) CMG is an example in the above picture.

One note about the yellow PIVOT flags: they can mean THREE things to you depending on your circumstances. If you are holding a share and you see the support PIVOT (downward slanting arrow) it could be a warning that you might have to get ready to EXIT your trade if the support does not hold. But if you do not currently hold the share this might be a heads-up to you that a possible shorting opportunity is arriving if the support does not hold. In another scenario, you might have your eye on the share as you missed the initial run-up and if the support holds, (the share bounces of the support line) then this is a good PIVOT POINT to enter a trade, since the support has been successfully tested and in all likelihood the share is at a localized trough and will move up to the resistance line now.

If you click on any share, you are taken to its DONCHIAN chart where the 10 and 20-day Donchian channels are shown together with the share. From here you can inspect support, resistance and pivots as they occur.

Ignore the brown bars for the moment, they are for trough detection discussed later. The dark gray shaded area enveloping the share price is bounded by the Donchian 10-day upper (resistance) and lower (support lines.) The light green shaded area defines the 20-day Donchian channel (larger more significant levels of support and resistance.) You can see that CLICKS has just broken through its 10-day resistance level, a bullish sign that larger moves may be afoot. This would be signaled by a green flag in the "10" column.

About midway through the chart you can see when CLICKS broke under its 10-day support and then 5 days later its 20-day support levels. These two events would have been signaled by yellow PIVOT flags as the share approached to within 0.5% of the support levels and then by red flags on the days they breached the levels (your SELL signals). These are classic SELL signals that arrived before the balance of the decline took hold.

The shorter the time period (10 days) the quicker you got out, as the more sensitive the sell signal is, but on the other hand, this can sometimes exit you early from a sustained up-move. For this reason you elect to watch 10-day Donchian signals for short term trades and 20-day signals for medium term trades and 40-day signals for longer term trades. It depends how active you want to be with your trading. Some 40-day channel trades can last several months and even up to a year!

On the extreme left of the chart you can see that CLICKS broke its 10-day resistance, and in fact it was also its 20-day resistance, so this was quite a significant breakout, which of course led to further rises in price. The above example shows short moves but in fact these trades can sometimes lead to quite long and profitable trades!

As you can see with the CLICKS example above, when the share is continuously pushing against its resistance level and raising it in the process, then this is very bullish. Conversely, when it is continuously pressing down on its support level and lowering it in the process, this is bearish trend.

If CLICKS in the above chart had to now break through its 20-day resistance level defined at the very top of the chart then this would be quite a significant break of large resistance and would be interpreted as a very bullish signal for a trader. It means CLICKS is making significant new highs and getting a lot of investor support to push it past its previous high.

NOTE : In the pictures below, you will see flags instead of arrows in the DONCHIAN columns. These are older pictures before we introduced the newer arrows. For the purposes of the rest of this document, just pretend a green flag is a green up-arrow, a red flag is a red down-arrow and a yellow flag is a downward slanting arrow (a support pivot).

TROUGH-FINDER
This shows you the status of our various proprietary trend and trough reversal algorithms.

Column "V"  has a green tick or yellow exclamation mark alerting the trader that the share in question is displaying trough or trend reversal behavior. The tick or exclamation mark depict which quantitative system triggered the alert.

Sincerity Index
Column "Sin" is associated with PowerStocks' proprietary "Sincerity Index" which is an indication of a shares' price-breadth and merely measures the number of back-to-back (consecutive) advancing days in the last two weeks of trading. 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. When a share is experiencing its own "bear market" it is very rare to see more than 2 back-to-back advances in a 10-day trading window. The number of back-to-back advances as at the current date is shown by a number with a blue histogram showing the past history of this metric over the last 20 trading days.

We can see that HYPROP 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 - which you can confirm by glancing at the "History" column which shows the share price over the last 50 trading days.

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. Such a rise is VULNERABLE as it is not underpinned with any CONVICTION associated with back-to-back advances.

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 (the longer the better) and then suddenly the Sin rises by 2-3 points (from 0 to 2 or from 1 to 3 for example) then this is a sign the correction is over and buyers are returning to share, propelling it upwards with conviction. It takes a lot for a share that was languishing to suddenly register 2 or 3 back-to-back advances in 10 days. When this occurs, you will see a green encircled tick in the "V" column, telling you this share appears to have made a trough reversal (V representing the "bounce"). Rises from 0 to 3 are much safer to act upon than rises from 0 to 2. Similarly rises from 1 to 4 are much safer than from 1 to 3. But if the time the share languished at 0 or 1 is very long then this advantage wanes somewhat. If we click on the share name we get taken to the Breadth Viewer for HYPROP (shown on the left in the below image)

The Sin index is shown by the vertical brown shaded bars. You can see on the left chart for HYP that it sat at 0 for 15 days as the share slid sideways and then suddenly rose to 1 and then to 2, alerting us a reversal or sudden change in trend was about to occur. It happened again on the right hand side of the HYP chart, alerting us another upswing was due. The chart on the right shows that as DATATEC declined the Sin dropped to 0 as back-to-back advances disappeared. Then suddenly they re-appeared alerting us early on to a massive movement that was a highly profitable trade of 20% gains.

Then, as DTC approached a peak, buying power started waning and the Sin index started diverging with the share price - a warning to us that a top was approaching and we needed to get ready for an exit. Of course you can see DTC breached its lower 10-day Donchian support level and this would have raised a red SELL flag in the DONCHIAN "10" column which meant short term traders would have got out. Those traders following longer term trades would have been watching the 20-day Donchian though and as you can see, they would still be holding onto their trades, hopefully to ride the next up-leg that is now being signaled by the vertical brown bars again rising from 1 back to 3 then 4 as buying interest renews itself. In fact the right of the chart shows us DTC breaching its 10-day Donchian resistance level, confirming the BUY signal from the Sin reading. Although the medium-term traders are set for another up-leg, they had to stomach a 6% draw-down for that privilege. In this case, the short term traders are lucky as they can action the new buy signal and ride the roller-coaster again, meaning they probably had the better trades - but this does not always happen this way and sometimes short-term traders miss big moves once been shaken out in a mild correction.

One question that is often asked is why we use back-to-back advances to measure for a new up leg and we don't just look at the price chart for the reversals. It's because when one only considers daily price data when trying to gauge for a bounce, it leads to a lot of false-signals. You can see to the right of the DTC chart that as DTC was correcting from its peak, the price started moving up again and this would have tricked us into a premature trade on two occasions. Only when back-to-back advances rise from 0 to 2 or from 1 to 3 is there enough "evidence" of buyer conviction to provide for far higher accuracy and less false signals. In this case the premature entries would have been harmless, but in most cases during an ongoing correction, premature entries can be very costly indeed.

You do not need to fire-up the share's Breadth Chart to inspect the Sin index, you can simply glance at the "Sin" column to view the blue histogram of the Sin index over the last 20-days. Look for blank white space on the left of the histogram followed by blue bars suddenly appearing out of nowhere and the number "2" or "3" shown over the histogram.

Just as sudden rises from 0 or 1 tell us a trough is in the making, the peaking of a Sin index warns of a looming vulnerability to a correction - something NOT EVIDENCED from the shares' price action, as shown in the two examples below:

The Sin histogram only shows the last 20 days, whereas the history line chart shows 50 days, so the Sin histogram represents 40% of the right of the line chart. You can see the Sin indexes peaking then falling, warning that buying was drying up EVEN THOUGHT THE SHARE PRICES KEPT RISING. Single advancing days keep the share moving up, but the disappearance of back-to-back days warns us the party is coming to an end and we need to keep and eye out for a chair for when the music stops! These peaking patterns almost always accompany large corrections after a strong rise in price.

Sincerity Advance/Decline Trend Index
AD (first column) shows the Advance/Decline Trend Score (ADTS) for the share, another PowerStocks breadth-for-shares innovation.

ADTS is derived from the last 5 days. For each day a score is given by adding a point if the share advanced, subtracting a point if the share declined and adding 0 if the share stayed the same.
ADTS is the sum of all the points from the last 5 days and ranges from -5 (all 5 days were declining days, the worst trend) to +5 (all 5 days were advancing days – the strongest trend).

A vertical green UP arrow shows shares with a ADTS of 4-5 and depicts strong upward trending shares in the short term (i.e. RBW). An upward-slanting arrow depicts an ADTS of 2-3, a reasonable upward trend. A sideways arrow depicts an indeterminate trend with an ADTS of -1, 0 or 1. There may be a trend, but it’s not strong or persistent enough to call this way or that. A downward slanting arrow depicts a reasonable down-trend with ADTS of -2 or -3. A vertical red DOWN arrow depicts a strong and persistent down-trend with ADTS of -4 or -5.

When you click on the share's name in the "Tickr" column and then click on the "draw chart" function button at the top of JSW, you will see an ADTS chart for the share next to the Sincerity chart:

The ADTS score is scribed on a daily basis by the vertical green (positive) and red (negative) bars.
The ADTS is good for detecting trend reversals (up or down), sometimes detecting troughs a few days before they turn into Sin troughs and certainly before most technical indicators or moving average crossovers. The ADTS trough system merely looks for when the ADTS score has risen from deeply negative (-3 or less) to 1 or more. This tells us we had a switch from a strong downward trend to an upward trend in the last 10 days – a classic trough reversal signature. Shares that have this characteristic join the Sin troughs in the SV column, and are tagged with a yellow exclamation mark. They may not be as powerful and high-confidence as the Sin troughs (the green ticks), but for traders they are actually excellent early reversal indicators. The orange and black lines in the above chart are the 10-day moving average and the 20 day moving average respectively.

Not every ADTS trough share turns into a Sin trough share, since it is quite possible for a share to “creep” up slowly day by day without attracting any back-to-back advancing days. But ADTS troughs will allow you to capture trades on these shares that slowly march upwards “under the radar” of the Sincerity Index trough detector.  As a result, more ADTS trough candidates get presented than Sin ones and the laws of the market thus prevail – i.e. ADTS will have less accuracy than Sin.

The idea is to further inspect both ADTS and Sin short-list candidates presented to you by clicking on the spark-chart in the "History" column and further inspecting the share. Sometimes an ADTS candidates doesn’t look that convincing on the Java Chart and you simply move on to the next opportunity. As with any sophisticated tool, perfection comes with practice as you build up a technique for use and come to understand nuances, so even if you are not trading, always inspect the ADTS candidates and monitor their progress over ensuing days to see it all working.

ADTS and Sin are not perfect and as with any trough detection mechanism for individual shares (which are never as accurate as less volatile indexes) there are false signals – something that really looks like its recovering only to break through support and fall again. But the idea is to have the tools to take the grunt-work out of identifying interesting candidates for you and to stack the odds in your favor and you manage your downside risks accordingly with proper money management rules. You will win more than you lose. That’s trading with the right tools and techniques.

METHODOLOGY AND TECHNIQUES OF USE
You need to decide a few important things before embarking on a systematic trading program with ShareTrader.

1. What size portfolios will you trade with? As a beginner we suggest you stick to no more than 3 concurrent trades so you can properly apply your focus and techniques to the trades to acquire some skill in the process and gauge how your psychology gets affected by the trades. As you gain confidence, you can extent your trading portfolio up to 10 shares at a time if you are very experienced. Of course your trading capital will also govern you amount of open positions at any one time. We would not recommend trading less than R10,000 per trade, so for 5 concurrent positions you will need R50,000 trading capital.

2. Will you use leverage or not? If you are a beginner, we suggest you do not use leverage (CFD's, SSF's etc) as the wild gyrations in prices can expose you to extremes of emotions and sabotage your trading efforts by forcing you to not follow the trading rule regime. Get confidence and wins behind the belt with straight equities or even better just trading the ETF's (which is safer as they are less volatile than individual shares.) After working your routine to habit, and understanding how you react to emotions of fear and greed, move to leverage.

3. Proper position sizing & money management :  Incorrect application of this principle  is 80% of why most traders fail. We suggest you expose not more than 2-3% of your trading capital to risk of loss per trade. Whilst you will be using ShareTrader's exit signals to close trades, you also need to program in an initial stop-loss for each trade to cater for absolute worst-case loss and allow you to perform proper position sizing. If your charting package gives you the Average True Range (ATR) for a share, then use 1xATR or 2xATR for your initial stop. So if a share price is 100 on the day you enter a trade and the ATR for the share is 2, then 2xATR=4 and 4/100 = 4% is your initial stop. If you do not have access to ATR (we are looking at building it into JSW but this will take time) then just use any percentage from 4-6% as your initial stop. Assuming you use 4%, then this means you are not willing to lose more than 4% on this trade and when losses reach this amount you get out regardless. This means the 2% of your capital we want to expose to risk per trade must equate to the 4% loss. Say your trading capital is R100,000. 2% of this is R2,000 which is the maximum we are prepared to lose on the trade. This R2,000 loss will be incurred when the share drops 4% after purchase. This means you can expose R2,000/4% = R50,000 capital to the trade. Divide the share price of the share you want to trade by R50,000 to work out how many shares you can trade. After placing the trade, program in the 4% stop loss (its not a trailing stop). When the share has appreciated by more than 4% you ignore the initial stop and follow the ShareTrader exit signals you have chosen.

4. Filling the portfolio. Each day, open JSW, click on the "TROUGHS" button and a list of 10-15 trough reversal candidates that trade on average more than 10 times per day will be presented to you. Inspect each share by using the BreadthViewer charting module and your own charting package or the JavaChart that opens when you click on the price chart in the "History" column. Inspect the share to see if it looks like a good trade. Stick to liquid large cap shares to start with and move to smaller caps as you get more experienced. This procedure will allow you to fill your portfolio with trough reversals. To go for a safer route, whittle down the initial TROUGHS list by filtering out those shares that have not yet broached their 10-day highs. This will be a much shorter list where the shares are showing signs of trough/trend reversal AND are making new 10-day highs. You may also elect to only trade shares that are trading above their 20-day moving average. The below list as at 27 August 2010 was the result of such a process. Clicking on the TROUGHS button revealed 17 candidates. We then set the DONCHIAN "10" column to only show green flags(green up arrows), to depict the share was breaking new 10-day resistance levels and this shortened the list to 9 candidates. We then filtered the MA TREND "20" column to exclude all blanks to land up with the list below:

This gives you 6 opportunities to inspect further with the BreadthViewer and maybe decide on a SINGLE trade you think looks the most promising. The process to get the above list took 30 seconds and the inspection process is probably 1 minute per share tops. A total of under 7 minutes! Incidentally only CLICKS, BLUE, SACOIL and SANYATI looked promising. CLICKS and BLUE are shown below at the time of the above list. The trough signals for both these shares would have appeared in JSW  2 days before what we are viewing now, so you would have got in really early in these powerful up-moves:

If nothing takes your fancy then wait - there is always a juicy trough reversal or resistance breakouts happening on the JSE. All the time - bull or bear market!

5. Choose a trade horizon and exit mechanism. Decide if you are going to go with a very short term trade, a medium term trade (if you don't have the time to continually be watching the share) or a long term trade. Depending on this decision choose your exit rule UPFRONT and stick to it. Repeat - stick to it! For short term trades we suggest using a Donchian 10-day support breakdown as your exit. If you look on the Donchian chart for your share you will see this support line acts as a trailing stop, moving upwards as the share moves upwards, locking in your profits on the way up.

The chart above shows the lower bound of the 10-day Donchian channel (dark gray channel) and the lower bound of the 20-day Donchian channel (light green channel) following the share upwards. As your share nears a peak the gap between the share price and the "trailing stop" will begin to narrow and one day they will cross and you will exit your trade. You can see the 20-day trailing stop is much wider than the 10-day one, allowing for more sizable corrections in the share to take place before triggering an exit. In the above example the 10-day stop exited the short term trader a few days after the share peaked, but the 20-day trader would probably still be holding as the 20-day stop has not been convincingly broken through yet.

6. Monitor your open trades. Tag your trades in the JSW_MYSHARES portfolio file with a "2" to indicate you have just bought this share and are placing it under close supervision. Then each day when you download the next edition of JSW, click the MYSHARES button to show all the shares you have tagged. Then filter the MYSHARES column to only show "2"'s (or half-filled in stars) to instantly reveal all the shares under close supervision. Then check there are no SELL signals. If you are using 10-day support breakdowns, ensure that there are no red down-arrows in the DONCHIAN "10" column for your share. If there is one, immediately SELL the share from your portfolio and replace it with another at your leisure (don't rush to replace it unless a nice opportunity comes up). Look for warning signs of an approaching top - crosses that start appearing in the MA TREND columns and the Sin histogram peaking. Look for warning signs of support coming close to being broken with the yellow downward sloping PIVOT arrows that start appearing in the Donchian columns. Ensure your share has not gone below its initial stop of 4% if you have not loaded it automatically in you online trading platform (we don't like auto-stops, we prefer to manually manage our stops - we don't trust the brokers who can see all our stops not to be tempted to take them out just before the share rallies again!)

7. You keep cycling between steps 4 and 6 to maintain your portfolio of 5 or 10 shares. Even with short trailing stops, you will probably be pretty idle waiting for things to happen and should not have to devote too much time to nursing your trades. As you get more experienced you will start using the green flags (breakouts) and yellow flags (pivot points when share bounces off support) in the Donchian channels  to identify more buying opportunities. You may even elect to short some shares when you see red down-arrows. For shorting, you use the reverse process to close your trades - i.e when the share starts appearing in the troughs list, its decline is probably over and you need to cover your shorts.

>>> END OF TUTORIAL #1 <<<

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