WELCOME TO POWERSTOCKS RESEARCH ORIENTATION PAGE

We are glad to have you join us on our exciting quantitative investment journey and look forward to many, many years together as a successful combination in the JSE. Our site is labelled as "complex" and we are striving to continually improve this. However our focus for now is on successful investment/timing models and not aesthetics.   You are therefore strongly urged to invest 30 minutes reading this page and its associated links to maximise your investment in our subscription, to get productive as soon as possible and to increase your chances of success.

VERY IMPORTANT : If you have not already attended one of our 4 hour training seminars, then we strongly suggest you book one over here

1. GROUND RULES
Let's get the unpleasant stuff out the way first. You will have signed for this in your subscription contract, but we want to repeat it. Please note your user-ID is for single use (1 PC at home and one at work, but not for concurrent use) licence only and for your use exclusively. We utilise several mechanisms to combat password and email-forwarding fraud so please do not hand this out to your friends/associates as our agreement allows for account suspension (without a refund) should we detect multiple people with different IP addresses using your login credentials or opening reports originating from your email account.

All downloadable reports have HTML code embedded in them that are tied to your login credentials so please don’t forward them to colleagues as this will be detected as your report being read from multiple locations. You may print and save reports/charts for your own personal record-keeping however. Please also note we may change passwords about once every 3-4 months (you will be notified via email of your new password). Keep your user-name AND your password strictly confidential, in fact treat BOTH as passwords. Don't even divulge your user-name in correspondence to us, use your proper name and surname.

Even if you have a professional corporate account, you may not hand this password out as our systems will detect multiple access and your account suspended. If you would like a multi-use licence for your company please contact us to negotiate a fair fee for a company-wide user-name. We take copyright and/or violations of our licence terms very seriously and will not hesitate to follow through with account suspension and in some cases prosecution or claims for damages.

2. INTERNET BROWSER COMPATIBILITY
We recommend  that subscribers use the free Mozilla Firefox browser for our web site. It is only a 7.5Mb download and is a much better/faster browser anyway. The free Google Chrome browser works well on our site and is also incredibly quick. Apple's Safari also works but its not as snappy as the other two. These browsers resolve several irritating "quirks" we have with Internet Explorer when it comes to downloading JBAR files and permissions management to PRO content. But besides this, they are just so much quicker to load and provide for faster and better responsiveness. You can have two browsers co-exist on your PC and if you want, only use FireFox or Chrome for PowerStocks and Internet Explorer for all your other stuff.

3. MICROSOFT EXCEL COMPATIBILITY
The all-important JBAR report is published as a 550Kb Microsoft Excel 2007 spreadsheet. You cannot view it with older versions of Excel such as Excel 2003 as it uses special formatting and charting. By using Excel we cut down on the file size and offer crisp high resolution charts which you can zoom in/out for closer inspection. If you do not have the latest Excel 2007 (e.g. you only have Excel 2003) then you can view JBAR by downloading Microsoft's free Excel Viewer from their website, which is 75Mb in size.

To operate the JSE Share Watchlist (JSW) program you will need Excel 2007 minimum, but we recommend Excel 2010 for best operation. You can buy Microsoft Office 2010 Home and Student edition at many computer stores for about R680 and this provides you will Word, Excel and PowerPoint 2010 for use on up to 3 PC's in your home. You can also download a 2-month free trial of this software directly from www.microsoft.com

Our advice? Don't mess about - your money is serious business so just get Office 2010 and be done with it.

4. PERSONAL COMPUTER COMPATIBILITY
It amazes us when people are managing their hard earned money on the stock markets with out of date, old and cranky PC's. You need at least Windows XP, Vista or Windows 7. As we stated, for best results you need Office 2010. Make sure you have a fast PC. You will know your PC is not fast enough if it is older than 4 years. Unless your screen can handle at least 1280x720 resolution you are going to run into trouble with the stock market. There is no such thing as a screen that is too big when it comes to this game. Take it from us. Considering a new laptop? Get a 17-inch screen!

5. USE OF PASSWORDS TO ACCESS PROTECTED CONTENT
Whilst there are many public pages on our site, we protect the bulk of our premium content with PowerStocks Credentials which are a User-name and Password pair which you will be asked to enter to view protected content (usually depicted by green menu links.) A login prompt for these credentials will be issued ONCE PER BROWSING SESSION and look like the image below, before you will be permitted access. The credentials would have been emailed to you in a welcome email.



6. FINDING INFORMATION AND UPDATING SCHEDULES
There are several scheduled releases of information from us to subscribers. You are urged to take note of the following to avoid confusion.

NOTE : We email all information to you. For now, you do not need to come to the web site to collect any information except new research, models or notes. For this reason, you need to do TWO important things:

1. Make research@powerstocks.co.za and info@powerstocks.co.za SAFE senders in your email program. Go to the Microsoft knowledge base article on how to do this.

2. A common problem is subscribers have email inboxes that get full or don't allow for sufficient data and then their email server rejects our emails and they miss out on important alerts. Make sure this doesn't apply to you. It is probably best to setup a dedicated email address for all your PowerStocks alerts. A free Gmail account is perfect for this purpose.

The JSE Pulse (TJP) gives a summary of the JSE including an update on all our long term timing investment timing models and an analysis of JSE overall health. It is updated on the 1st working Monday of each second month starting January. A past copy would have been emailed to you in your welcome email and you should read it.

The JSE Breadth Analysis Report (JBAR) is our detailed report on about 20 JSE breadth metrics we use to measure the health of and time the JSE. There is a JSE BREADTH sheet with the indicators, a JSE TIMERS sheet with all the timing models we use to trade the ALSH index itself and a SECTOR TIMERS sheet for timing Exchange Traded Funds (ETF's) that track various JSE sectors and some commodites such as GOLD, SILVER etc. It is emailed to you every Sunday. Do not worry about missing anything in-between these dates  as we update and analyse the reports every day and when we see something we feel you need to know about, including when any of our timing models enter or exit their trades, we will send an email alert to you in the evenings.  Please study the JBAR HOW-TO tutorial carefully to ensure the charts you see in this email don't look like jibberish to you.

The SYSTEM ALERTS are email alerts about important events and triggers we monitor and is sent out on a daily ad-hoc basis depending if there is something important you need to be alerted about. A few days can transpire with no emails, whilst other days can have multiple emails. There are pre-close alerts and post-close alerts. With pre-close alerts we publish an alert based on a scan of the JSE at 4pm, where (and only when) we have a fair degree of confidence that trade between 4pm and 5pm will not alter the nature of the alert significantly. The pre-close alert gets published via e-mail before 4:30pm and allows you 20 minutes to effect a trade before the market closes, to ensure you can either get in or get out early.

The JSE Share Watchlist (JSW) is used for subscribers to identify investment AND trading share (equities/stocks) candidates. It gets emailed to you most evenings after 10pm, but sometimes early the following morning before 9am. You need Excel 2007 minimum or Excel 2010 (preferred) to operate the file. Please ensure you read the installation and activation procedure for operating the program, specifically the section on how to download and configure your personal portfolio file and how to ensure you enable macros to allow the automated functions to run.

We normally load our “share picks” for the day into shopping basket-A. These are normally the shares we feel look the most attractive but please be aware these are not all the shares that are presenting themselves as good trading candidates. We just do this for busy subscribers who don’t have the time for their own analysis. We are not too fond of this as we prefer subscribers to view all candidates and make their own trading decisions, but we understand many subscribers have day jobs and simply don’t have the time required and are happy to blindly follow some of our suggestions. 

Please don't phone us with support and assistance with the program unless you have studied its tutorials properly. We are just as busy as you and nothing is more irritating to our staff when a client phones in who clearly has not bothered to look at the tutorials we have painstakingly put together.

New Research, Features, Documents and Strategies get posted on an ad-hoc basis to the web site in various locations. These may be new HOW-TO tutorials, research and launch of a new stock picking or market timing strategy, new backtests, an annual performance report on a particular strategy or an enhancement/update of an exiting document. We alert you to these through the NEWS main menu tab, so you are encouraged to glance at it from time to time. But in addition to the NEWS blog, you will also detect new or updated documents in links on menu pages that have *NEW* or *UPDATED* next to them to bring this to your attention. When we update a document its for a good reason so you are strongly urged to re-read these documents when you see these flags.

7. ACTING ON POWERSTOCKS JSE ENTRY SIGNALS
About once per month on average, one of our quantitative signalling systems will generate a BUY alert. These alerts are periods when the market is about to complete a trough and/or experience a surge. To be able to capitalise  on these signals, please read the "How to prepare for TroughFinder or other ENTRY signals" in the HOW-TO-->INSTRUCTIONAL menu. If you plan on actively trading our signalling systems we strongly suggest you also read the "PowerStocks Trading Guide".

Before making a trade or buying a share for investment purposes, then please ensure the following before committing funds to the market:
 
1.) Ensure the SUPERModel and LBYC long-term timing models are giving the "ALL-CLEAR".
2.) Ensure the Hedge Trader HT-1 strategy is not shorting the JSE and that C >=2
3.) Ensure the McClellan Summation Index is above zero and preferably trending upward.
4.) Look at the TroughFinder chart and ensure no A-Signal is showing!
5.) To be more safe, ensure there has been a recent TroughFinder BUY signal
6.) To be very safe, ensure there has been a recent BITS, STORM, QUANTUM or BIGDIPPER signal
7.) If you are overly cautious and patient, wait for one of the events in (6) and (7).
8.) Use JSW to check the shares trend score is at least 2 and its sincerity score at least 3

If you follow these rules and selected a share from one of our strategies, it should be very rare that your purchase declines in price or that you have to endure a correction or even minor consolidation over the near term. For more details on reducing your risks even further, go to the
Market Timing Main Menu or read Reducing your Strategy Risk.


8. BUYING OR TRADING INDIVIDUAL SHARES WITH JSW
If you are eager to get at some share candidate lists for your own investment and trading purposes, they are available from the JSE Share Watchlist (JSW Report) which is emailed to you every night as a zipped Excel program. JSW allows for the systematic operation of a mechanical share trading/acquisition regime over short, medium and long-term horizons. You are strongly advised to read the detailed “Trading mechanically with shares” tutorial. Please also take the time to view the JSW and ShareTrader Video Tutorials.

IMPORTANT : To use JSW properly, please ensure you study the JSW Installation & Configuration guide. Also, you need to download the JSW_MYSHARES personal portfolio zip file, unzip it and save the Excel sheet to a folder called “PowerStocks” in the root of your C: drive. Make sure you save the file as JSW_MYSHARES and not “Copy of JSW_MYSHARES”. You need to edit this file with your trading capital, risk metrics and name of your CFD provider to get the best benefits from JSW. Once done, you never have to worry about this file again.

The process with JSW is as follows. First you wait for a large correction of 5% or more. Then you wait for a TROUGH REVERSAL signal from us to say it is safe to get back in the market. We do this by using our TroughFinder, Big Dipper and Fosback Great Trough detectors. Then you load JSW and click all the buttons on JSW to find those shares you want to invest or trade in. After buying a few shares you sit tight and follow the JSW sell signals for each share. When the market  gets close to a top your account will start emptying of shares as they hit their stops. By the time the correction sets in your account should be virtually empty. You start the process over again.

If you bought shares for investment purposes, as they had redeeming qualities shown by JSW then you should wait until they have proved themselves with at least a 5% gain and then transfer them from your trading account to your investment account. Your broker should allow multiple accounts. You then hold onto the shares until the SuperMODEL, LBYC or Cash/Equity investment timers issue a recession signal. This is the ONLY time you sell your investment shares. After 3 years passes hopefully without a recession, you can prove to the taxman that all the shares in your investment account were untouched for 3 years since no transactions are being posted on the investment account. The idea is to pay capital gains tax as opposed to income tax. However NEVER let tax considerations dictate your operations on the markets. If there are recession signals then get out - otherwise you land up paying heavy taxes anyway - only this time to the stock market and not SARS (as a nasty correction is likely).

9. EASE INTO IT WITH INDEX TRADING
We recommend you start with some real trades (with real money) on any of our TOP40 timing models before venturing into individual equities trading with JSW. To execute the strategies use SATRIX-40 ETF or CFD/SSF thereof or TOPI warrants or SAFEX Index futures. Keep high gearing to the shorter term strategies and use no gearing for the longer term strategies. If you are new to trading the TOP40 Index stay clear of gearing/leverage. 

Go to www.satrix.co.za or www.etfsa.co.za to learn about Exchange Traded Funds (ETF's) They are the safest, easiest and most cost effective way to invest or trade on the JSE. They are listed on the JSE just like normal shares with all the protection and liquidity of large caps.

We suggest you read up and learn about all our systems and their expected performance so you are prepared to act on one of their signals when you see it in a SYSTEM ALERT email. Start with the “15 year performance of our TOP40 timing models”. This page has links in it to all the systems it talks about. Index trading/investing is far safer and less complicated than individual JSE shares. We always tell beginners to gather some profits and built their equity accounts trading the TOP40 index with one of our models and then venturing into individual shares at a later stage. There are some guidelines around this in our TRADING TOOLS GUIDE. We suggest trading a mix of short, medium and long term models as a minimum, all in parallel. This means you may well have 3 concurrent trades open which will open and close at different times.

The easiest (safest) systems we recommend you consider for inclusion into your Index Trading program are below, listed in order of low to high risk:

1.INVESTMENT TIMING : Composite SuperMODEL
2.LONG-TERM TRADING : Zweig LazyBoy and/or Turtles-S3 (whichever fires first or play both)
3.MEDIUM-TERM TRADING : HedgeTrader HT1/L0
4.SHORT-TERM TRADING: The Sincerity Trader
5.AGGRESSIVE TRADING : SwingTrader ULTRA (seperate R850p/m subscription)

Wait for new trades, don’t try and hitch-hike an already open trade as results can be unpredictable then. When you have a few wins behind the belt, and understand the ins-and-outs of mechanical trading, then you can progress onto inidivual equities (shares) with our JSW program. Paper trade some equities trades with JSW if you are a beginner, at least through one trough-to-peak cycle. For best results, split your equity 2/3 Index trading and 1/3 JSW equity trades (as a rough guide.) It is not uncommon for our most successful subscribers to have 10 open trades at any one point across these three categories (we currently have 15 open trades in addition to the 15 long term investments we are holding!). When a signal comes along we normally give you the odds of success and you are then invited to open a trade. Open a trade with your broker EVERY TIME one of our systems fires. Some will be short term, some medium , some long but for best results the more trades across multiple quantitative systems the better the diversification and lower your risk.

10. THE MOST IMPORTANT THING IN THIS MESSAGE – PROPER RISK MANAGEMENT
For the Index trading you must look at the average drawdown of the system you are trading to calculate your maximum risk. You can find this in the Trade Actuarial Tables, or alternatively use a round figure of 5%

Best practice dictates you risk no more than 2% of your trading capital on any one trade. If M is the amount of money in your trading account then the maximum sized trade T you can make each time is shown by the formula: T = 0.4M

So if you have R100K allotted to index trading and you see your 1st signal you can buy R40K of SATRIX40 (or R4K of SATRIX40 CFD or SSF’s). This way, if the trade blows up, you will be out for 5% of R40K which is R2,000 loss which is only 2% of your account.

As you start winning and growing profits you can trade larger amounts. If you hit a string of losses the method will scale-back your trade sizes. Using this method it is mathematically impossible to wipe out. Failure to correctly position-size as demonstrated above is the top reason beginners fail at trading! You have been warned!

11. BE PREPARED
Please read our JUST THE BASICS introductory tutorials in the HOW-TO main menu tab at the top of each page. Make sure you put all our offerings in context by reading The PowerStocks Way. Make sure that whichever of our investing or timing strategies you follow you understand them fully – you should ensure you read our website back-to-front before committing funds to the market. We do not condone investors blindly following our signals without understanding the theory or methods being used to issue BUY/SELL signals – the signals are only half the story – your mindset and psychology and trade execution are the rest and if you do not understand the theory and reasoning you will not come to the party with the right psychology to ensure a successful trade or investment. It is not in our interests for you not to be successful at investing, as we will lose you as a client.

If you are going to study anything, then we insist you start with the following critical documents:

1. All the documents in the "JUST THE BASICS" menu in the HOW-TO section
2. Introduction to McClellan Indicators
3. Detailed tutorial on use of the McClellan Oscillator & Summation Index
4. Using JBAR for risk-reduced profitable trading
5. Acting on TroughFinder or other ENTRY signals.
6. The theory behind the various share-picking strategies .

VERY IMPORTANT : If you have not already attended one of our 4 hour training seminars, then we strongly suggest you book one over here

12. REFERRALS PROGRAM
If you refer an associate or friend and they provide your name in the referrals section on their membership application form, or you inform us of an investor you know who signed up with us due to a referral from yourself, and we confirm this with the new applicant, you will receive 3 months additional membership free of charge which will be added onto your existing contract terms. In this fashion, if you make up to 4 referrals, you get 12 months free membership added onto your existing contract! To incentivise new applicants to put the names of the people who referred them on the application form, they will receive an additional 1 month free subscription added to their contract if they indicate on their application form who referred them.

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