Más contenido relacionado Technical Analysis - What is it? (chart reading?)1. Technical
Analysis
Technical
Analysis?
candlestick
What is it? chart
patterns
patterns October 2011
price
breakout
monthly candle chart
© Copyright 2011, Robert B. Brain,
Brainy's Share Market Toolbox — www.robertbrain.com 1
Rev 1.1a
2. Technical
Analysis
Disclaimer
➔ CAUTION!!
➔ This presentation contains NO advice.
➔ It is for general education only.
➔ Always consult a trained, trustworthy
professional before investing,
to determine if your intended investment
might suit your personal individual situation.
2
3. Technical
Analysis What is Technical Analysis?
A definition
The use of market data and
The use of market data and
charting skills to anticipate market
charting skills to anticipate market
direction and timing
direction and timing
to make consistent profits.
to make consistent profits.
© Copyright 2011, Robert B. Brain,
Brainy's Share Market Toolbox — www.robertbrain.com 3
4. Technical
Analysis What is Technical Analysis?
T.A. is: . . .
1. Price charts and chart patterns
2. Candle patterns
3. Chart Indicators
● Moving Average, MACD, RSI, P-SAR, etc.
4. Numeric analysis
5. Specialist topics:
● Fibonacci, Elliott Wave, W.D.Gann
6. Using charting software
© Copyright 2011, Robert B. Brain,
Brainy's Share Market Toolbox — www.robertbrain.com 4
5. Technical
Analysis Price Chart Basics
The Weekly Line Chart
Weekly Chart:-
Shows the Closing price
at the end of each week.
The weekly Closing prices are
joined together by straight lines.
© Copyright 2011, Robert B. Brain,
Brainy's Share Market Toolbox — www.robertbrain.com 5
6. Technical
Analysis Price Chart Basics
Up Trends
Could you have been tempted to buy this stock?
If only we could
If only we could
spot these trends
spot these trends
and take advantage.
and take advantage.
Up 81% in
40 weeks.
© Copyright 2011, Robert B. Brain,
Brainy's Share Market Toolbox — www.robertbrain.com 6
7. Technical
Analysis Price Chart Basics
Down Trends
Would you be tempted
Would you be tempted
to buy this stock?
to buy this stock?
(ps: it's Telstra)
(ps: it's Telstra)
© Copyright 2011, Robert B. Brain,
Brainy's Share Market Toolbox — www.robertbrain.com 7
8. Technical
Analysis Price Chart Basics
Defining a trend
● Identify the Peaks
and Troughs.
● Look for:
Higher Peaks (HP)
and
Higher Troughs (HT)
(or Higher Highs and
Higher Lows).
© Copyright 2011, Robert B. Brain,
Brainy's Share Market Toolbox — www.robertbrain.com 8
9. Technical
Analysis Price Chart Basics
Trend = Higher Highs and Lows
Get a feel for what the
price is doing.
Identify trends
(up, or down), or
non-trending.
Use indicators to help.
Terminology:-
© Copyright 2011, Robert B. Brain, Higher High = Higher Peak
Brainy's Share Market Toolbox — www.robertbrain.com Higher Low = Higher Trough 9
10. Technical
Analysis Price Chart Basics
Beware the down trend
Not a good idea to invest
Not a good idea to invest
in a down-trending stock,
in a down-trending stock,
until the trend has finished*.
until the trend has finished*.
© Copyright 2011, Robert B. Brain,
Brainy's Share Market Toolbox — www.robertbrain.com
**— Dow Theory
— Dow Theory 10
11. Technical
Analysis Price Chart Basics
Chart patterns
Base Consolidation
Base Consolidation
© Copyright 2011, Robert B. Brain,
Brainy's Share Market Toolbox — www.robertbrain.com 11
12. Technical
Analysis Price Chart Basics
Chart patterns
The Bullish
The Bullish
Falling Wedge
Falling Wedge
chart pattern
chart pattern
© Copyright 2011, Robert B. Brain,
Brainy's Share Market Toolbox — www.robertbrain.com 12
13. Technical
Analysis Price Chart Basics
Chart patterns
The Expanding Triangle
The Expanding Triangle
(megaphone)
(megaphone)
chart pattern
chart pattern
© Copyright 2011, Robert B. Brain,
Brainy's Share Market Toolbox — www.robertbrain.com 13
14. Technical
Analysis Price Chart Basics
OHLC Bar and Candle...
Each bar on a
bar chart, and
each candle on
a candle chart
summarises the
price action
in any one period
(a day, week, month, etc.).
© Copyright 2011, Robert B. Brain,
Brainy's Share Market Toolbox — www.robertbrain.com 14
15. Technical
Analysis Price Chart Basics
Support and Resistance
Support lines
Support lines
Resistance
Resistance
© Copyright 2011, Robert B. Brain,
Note: Sometimes a
Brainy's Share Market Toolbox — www.robertbrain.com “fat pencil” is appropriate. 15
16. Technical
Analysis Price Chart Basics
Candle body and tails
● Their presence or absence is important
● Their length (ie. their height) is important.
© Copyright 2011, Robert B. Brain,
Brainy's Share Market Toolbox — www.robertbrain.com 16
17. Technical
Analysis Price Chart Basics
Candle patterns — small bodies
● With or without a gap from previous candle.
● Hanging Man (at tops)
● Shooting Star (2-candle pattern)
● Evening Star (3-candle pattern)
● Doji Star (2-candle pattern)
● Hammer (at bottoms)
● Morning Star (3-candle pattern)
© Copyright 2011, Robert B. Brain,
Brainy's Share Market Toolbox — www.robertbrain.com 17
18. Technical
Analysis Price Chart Basics
Patterns — engulfing and piercing
Reversal patterns in UP Trends:-
● Engulfing Bearish — “outside day”
(2-candle pattern)
● Dark Cloud (2-candle pattern)
● Harami Bearish (2-candle pattern)
© Copyright 2011, Robert B. Brain,
Brainy's Share Market Toolbox — www.robertbrain.com 18
19. Technical
Analysis Price Chart Basics
Patterns — engulfing and piercing
Reversal patterns in DOWN Trends:-
● Piercing Line (2-candle pattern)
● Engulfing Bullish (2-candle pattern)
● Harami Bullish — “inside day”
(2-candle pattern)
● Harami Cross (2-candle pattern)
© Copyright 2011, Robert B. Brain,
Brainy's Share Market Toolbox — www.robertbrain.com 19
20. Technical
Analysis Chart Indicators
Moving Average (MA)
● 21 day MA is the
average of all prices
for the last 21 price
bars*
● Can indicate a trend
● Can be used to
interpret buy/sell
signals. * - A “bar” - can be:
a daily bar on a daily chart,
or a weekly bar
on a weekly chart, etc.
© Copyright 2011, Robert B. Brain, or just each point on a line chart.
Brainy's Share Market Toolbox — www.robertbrain.com . 20
21. Technical
Analysis Chart Indicators
Moving Average — how to calculate?
Simple calculation of 8.5
3-period MA. 8 8 8
7.67 7.67
7.5
The first MA value is 7 7 7 7 7
the average of the
6.5
first 3 price values:
6 6 6 6
(4+5+6) 15 5.5
Price
= =5 5 3-period MA
3 3
5 5
4.5
4
4
1 2 3 4 5 6 7 8
© Copyright 2011, Robert B. Brain,
Brainy's Share Market Toolbox — www.robertbrain.com . 21
22. Technical
Analysis Chart Indicators
Bollinger Bands
A top line,
A top line,
average line
average line
and bottom line.
and bottom line.
Weekly
candles Share Market Toolbox — www.robertbrain.com
© Copyright 2011, Robert B. Brain,
Brainy's . 22
23. Technical
Analysis Chart Indicators
Average True Range (ATR)
Useful to understand the notion of ATR
ATR indicator
ATR indicator
This one shows the average
This one shows the average
variation in price over the
variation in price over the
last 14 candles.
last 14 candles.
Weekly
candles
© Copyright 2011, Robert B. Brain,
Brainy's Share Market Toolbox — www.robertbrain.com . 23
24. Technical
Analysis Applications, samples, strategies
Stop Loss? — under Support?
Initial Stop Loss position
Initial Stop Loss position
could be under recent
could be under recent
support and under
support and under
recent price action.
recent price action.
Down trend
Down trend
is broken
is broken
© Copyright 2011, Robert B. Brain,
Brainy's Share Market Toolbox — www.robertbrain.com . 24
25. Technical
Analysis Applications, samples, strategies
Stop Loss — using ATR
Wilson ATR
Trailing Stop
indicator
ATR = Average
True Range
The stop is set at
a multiple of ATR
© Copyright 2011, Robert B. Brain,
Brainy's Share Market Toolbox — www.robertbrain.com . 25
26. Technical
Analysis Applications, samples, strategies
Sample Trading Strategies
1. Find stocks using fundamental analysis and
time entry with technical analysis
2. High dividend yield
3. Long term bull market strategy, different to:
4. Shorter term bull market strategy
5. Different for a bear market.
6. Momentum indicator + MA-of-Momentum
(see next slide)
© Copyright 2011, Robert B. Brain,
Brainy's Share Market Toolbox — www.robertbrain.com . 26
27. Technical
Analysis Applications, samples, strategies
Sample Strategies
Momentum indicator
Momentum indicator
and
and
MA-of-Momentum
MA-of-Momentum
© Copyright 2011, Robert B. Brain,
Brainy's Share Market Toolbox — www.robertbrain.com . 27
28. Technical
Analysis Applications, samples, strategies
Sample Strategies
● Use ADX indicator for entry (Chuck le Beau)
● Use Parabolic SAR for exits
● Price Breakout
(see next slide)
© Copyright 2011, Robert B. Brain,
Brainy's Share Market Toolbox — www.robertbrain.com . 28
29. Technical
Analysis Applications, samples, strategies
Price Break Out
© Copyright 2011, Robert B. Brain,
Brainy's Share Market Toolbox — www.robertbrain.com . 29
30. Technical
Analysis Applications, samples, strategies
Moving Average Cross-over
© Copyright 2011, Robert B. Brain,
Brainy's Share Market Toolbox — www.robertbrain.com . 30
31. Technical
Analysis Applications, samples, strategies
Some successful strategies
These are in use by some successful traders:
● Use the MACD and the RSI indicators.
Look for RSI divergence against
the share price.
● Use Stochastic indicator and
Directional Movement (ADX)
to give joint signals.
© Copyright 2011, Robert B. Brain,
Brainy's Share Market Toolbox — www.robertbrain.com . 31
32. Technical
Analysis Applications, samples, strategies
Some more strategies
Note: None of these can be guaranteed!!
● Takeover target speculation
● Momentum trading
● Position trading
● Swing trading
● Dividend stripping
● IPOs
● Hedging
© Copyright 2011, Robert B. Brain,
Brainy's Share Market Toolbox — www.robertbrain.com . 32
33. Technical
Analysis Applications, samples, strategies
Isn't this gambling?
● Some people think that
share trading is just gambling?
● Without a proper trading plan and
trading strategy then may be it is.
● But if you have a proper, proven and tested
plan, then it is actually calculated risk taking.
● Compare with other professions:
– farming, retail business, catering,
– tourist trade, tradesman, handy man, etc.
© Copyright 2011, Robert B. Brain,
Brainy's Share Market Toolbox — www.robertbrain.com . 33
34. Technical
Analysis Applications, samples, strategies
Trading — Final Tips
Watch out for:
● Use a stop loss!
● Low liquidity
● Watch diligently
(don't take your eyes off the ball)
● Retracements
● Sucker rallies
● Profit takers
● The 3-period pause in a rally
© Copyright 2011, Robert B. Brain,
Brainy's Share Market Toolbox — www.robertbrain.com . 34
35. Technical
Analysis Specialised Topics
Fibonacci Retracement
© Copyright 2011, Robert B. Brain,
Brainy's Share Market Toolbox — www.robertbrain.com . 35
36. Technical
Analysis Charting Software
Use good charting software
● If you use a basic charting tool, then the
information might be limited to the basics
● Use a better tool for greater flexibility and more
informative results.
(in Australia — BullCharts)
© Copyright 2011, Robert B. Brain,
Brainy's Share Market Toolbox — www.robertbrain.com 36
37. Technical
Analysis Charting Software
Charting software – key features
● Data — Easy access to download data
● Price charts in various time frames
● Intraday data (optional)
● Indicators – draw them on the chart
● Watchlists – several lists of stocks to easily
keep an eye on
● Scans – Specify selection criteria and scan the
data for stocks that match the criteria
● Line studies and annotations on the chart
© Copyright 2011, Robert B. Brain,
Brainy's Share Market Toolbox — www.robertbrain.com 37
38. Technical
Analysis What is Technical Analysis?
Technical Analysis is: . . .
1. Price charts and chart patterns
2. Candle patterns
3. Chart Indicators
● Moving Average, MACD, RSI, P-SAR, etc.
4. Numeric analysis
5. Specialist topics:
● Fibonacci, Elliott Wave, W.D.Gann
6. Using charting software
© Copyright 2011, Robert B. Brain,
Brainy's Share Market Toolbox — www.robertbrain.com 38
39. Technical
Analysis What is Technical Analysis?
More details?
Refer to
Brainy's Share Market Toolbox:
www.robertbrain.com
for more information
This presentation:
© Copyright, 2011, Robert Brain
All rights reserved.
© Copyright 2011, Robert B. Brain,
Brainy's Share Market Toolbox — www.robertbrain.com 39