Robert Brain is a private trader and educator, contributing to the regular technical analysis column in the Fairfax press as well as the monthly ASX Investor Update newsletter. He has many years of experience with technical analysis and trading in the share market. Robert has combined his extensive experience as an educator with his share market interests to develop his web-based Share Market Toolbox business to help investors and traders to refine their own strategies, and learn about the strategies of others. He is an ATAA Councillor in the Melbourne Chapter, and a Director on the National Board (responsible for Marketing and Member Services), and he runs quarterly technical analysis education sessions.
What is the best way to choose stocks for purchase? Should we exclusively use either technical analysis, or fundamental analysis? Or a mixture? Or should we focus on a preferred market sector? Or perhaps choose a company that has a “good story” and hope they deliver?
In recent months the BullCharts User Group members have been playing a stock picking game, where each person is invited to nominate just one stock to hold in the game for a few weeks or months. Each member was invited to explain the details behind why they chose their stock. For a group of technical analysts the answers have been very surprising, and might be indicative of why ATAA members invest/trade in the stocks that they do.
In this session Robert will divulge the many reasons for stock selection that are in use among our colleagues and peers – which surprisingly include the use of both technical analysis and fundamental analysis to varying degrees. The information to be presented might give ATAA members some comfort with their own stock selection ideas and methods, so it will be a very useful session to attend.
If time permits, the webinar participants will be invited to contribute to the discussion and share their own observations about successful stock picking.
Another dividend season is coming up quickly — from about February to April. Do you have idle money and are you looking for income from the market? Are you interested in investing for dividends? Isn’t it easy? Isn’t it straight forward? Are there any catches? Isn't it easy to find a useful list of good dividend payers?, and then to buy-and-hold the stock for years? And to easily find the ex-dividend dates? And to simply follow the published dividend strategies? Isn’t this easy?
You might be very surprised at the real answers to these questions. In this session we:
- Share some observations about dividends and share price performance — these might surprise you!
- Explain some of the key details about dividends
- Show some example share price charts and the impact of dividends
- Refute the claims about simple dividend strategies
- Explain how to find relevant details about dividends.
How can we effectively use share price charts to analyse whether a stock should be bought or not? How can we interpret the price action? and the volume? and the various chart indicators that are available?
About 80 per cent of ATAA members are trend traders* on ASX stocks. In this session we will demonstrate the use of real price charts (using a laptop with no internet connection), and ask the audience to offer their thoughts, experiences and suggestions for:
- We want uptrending* stocks ? so how do we find them?
- Which stocks to look at?
- Should we focus on specific sectors?
- Does it matter whether we look at large cap, medium cap or small cap stocks?
- Should we firstly look for a confirmed uptrend, and chart patterns?
- What is the best chart indicator to use? (with suggestions from the audience for their favourite indicator).
- What "set up" or "trigger" conditions might we look at for an entry?
In this session we will be sharing collective ideas and experiences so that experienced ATAA members can help to share their knowledge with the less experienced members and visitors and try to address the above questions.
* - We will focus on a short- to medium-term trend trading strategy idea, rather than a breakout strategy, or pattern strategy, etc. This time frame is perfect for the busy investors/traders who only have a couple of hours each week to do their analysis and stock selection.
Wouldn't it be good if we could take a list of stocks (your own stock universe), and sort the list so that the strongest performing stocks (ie. the most bullish) are at the top of the list? And then invest in those strongest stocks in anticipation of the best price performance? We could also note the stocks with a low score near the bottom of the list and avoid them (or remove them from our portfolio).
Many people are familiar with the teachings of Stan Weinstein from his book "Secrets for Profiting in Bull and Bear Markets". Stan talks about several things, including the importance of the 30 week Moving Average (MA), and noting whether the share price is above or below the MA, and whether the MA is rising or falling. There are many indicator observations like this which we could use to easily identify bullish (or bearish) stocks. But what are they? And how can we use them? Should we use daily charts or weekly? Does this take long to do? Can it be automated?
In this session Robert will describe many technical analysis indicator observations, and a way to attach a useful score value to them, and to subsequently rank a list of stocks by their degree of bullishness. The discussion will also cover the pitfalls to be aware of.
When investing or trading in the equities market it is very important to think about how to manage the risks, and how to optimise your position size. This is important to both protect your capital from any downside risk, and to maximise your profits - every extra dollar is very useful. And it doesn't matter whether your investment capital is only $5,000, or $5 million. There are many ways to manage all this, but which is best? What are the arguments for and against using exactly the same size position every time? Is a position size of only $500, or perhaps $1,000 a good size for the new investor/trader? Should we enter a position using a phased approach? That is, half now and half later? Or in thirds, perhaps? What do we mean by "amount at risk"? How is this related to the initial stop loss value and the actual position size? How can we set this so that we can still sleep at night, and it won't matter if the share price falls by, say, 20 percent? This session will be an interactive workshop, with questions, input and discussion from start to finish.
11Have you ever had a list of stocks that you could invest in, but had too many to choose from? This can often happen. So, how to choose which stocks? How can we rank the stocks in order of "performance" so that we are buying the better performing stocks? In this session we will use standard technical analysis tools to look at two ways to readily sort a list of stocks to highlight the better performers. This will include a number of technical analysis tips for beginners. The same method can be used to quantify the performance of market sectors, and to identify the strongest performing sector.
Remembering that the price charts of stocks and the indexes summarise the underlying opinions and emotions of the market participants, we know that every chart tells a story, if only we can understand the stories in the price charts. In this session, Robert will utilise today's technical analysis tools to provide an insight into the underlying views of investors and traders today, focusing on the Australian market. He will utilise four key technical analysis principles:
- Study the plain price to look for trends, support, resistance and chart patterns (on daily and weekly charts).
- Study the big picture (because the market is like an elephant) and incorporate a favourite strategy (such as Weinstein's analysis methods).
- Utilise a couple of chart indicators (such as Guppy's MMA and Twigg's Money Flow).
- Make sure to look at changes in volume.
Robert describes this approach as the "4 Windows" analysis method to look at four different "views" of the market. This session will provide invaluable insights for both novices and experienced analysts, investors and traders. If time permits, input may be accepted from the experienced members of the audience for the benefit of the newcomers.
Some experts say that trading is 20% method and technicals, and 80% psychology and mind-set. Robert will show a few minutes of National Geographic research video to explain how the brain plays tricks on us. The observations of our senses are often manipulated by our brain before we draw conclusions and opinions about the world around us. By being aware of these tricks, plus the emotions of fear, greed and hope, investors and traders can implement effective strategies to deal with the issues to be much better at investing or trading the markets.
Many people don't realise this, but either a major market correction or a bear market comes around too often - about once every 3.5 years. It is important to be on the lookout, in order to protect our investment capital, and to stop our profits from being savaged. Robert will explain the importance of daily price charts, even for longer term investors, and some of the clues that help spot and avoid a pending bear market. In this session Robert will utilise the BullCharts charting software to demonstrate some of the charting tools and techniques that he will mention during the presentation (and if time permits he will answer questions regarding these BullCharts features).
Aussie Markets Update using the "4 Windows" Analysis Approach. In this session, Robert will outline the "4 Windows" approach to analysing stocks or the market, and use key aspects of this approach in a very hands-on style to analyse the current state of the Australian market - where has it come from and what signals are being given? This session will include the real-life application of Weinstein's analysis method to the Australian market today, as well as several chart indicators (including Guppy's MMA and Twigg's Money Flow), and it will provide invaluable insights for both novices and experienced analysts, investors and traders. If time permits, input may be accepted from the experienced members of the audience for the benefit of newcomers.
When about to place a trade to buy a parcel of shares, it is very interesting to note the different views people have about how to minimise risk and maximise profit — ie. where to set the Stop Loss, and how to set the Position Size, and other money/risk management considerations.
In this short workshop we will view a fantastic trade set-up situation on a price chart in December 2008, and we will discuss the possible options for:
- Initial Stop position,
- Amount at Risk,
- Price Target,
- Amount of Reward,
- Reward/Risk Ratio,
- Position Size and
- Trailing Stop.
To manage the discussion, only the people seated in the first row of the auditorium will be participating in the discussion, and others will be able to listen in (and take notes). [The front row will be permitted to consult with colleagues sitting next to them (like a team) to compete against others in the room, and to share their views and experience.]
Take an unfair advantage with a check list of 30 ways to increase your success in the markets. Risk and money management is not discussed often, as many people see it as too hard and complex; but in this session, Robert will list a number of simple ways that you can increase your chances of success, and will study four in detail. This will include consideration of two key Fundamental Analysis criteria as well as very useful Technical Analysis considerations.
It can take many years of reading text books and newspapers, attending lectures and seminars, and watching news reports, to hear a number of those very useful “tips” and observations about the share market. We can call them Share Market GEMs, or pearls of wisdom. They might be very useful clichés, adages, proverbs, axioms or infamous Wall Street sayings. Over many years, Robert has accumulated a long list of more than 100 of these Share Market GEMs, many of which are great snippets of very useful information. But be careful, because some of the touted Wall Street sayings are actually furphies!
In this presentation Robert will share many of the more useful, and the more contentious, GEMs, including:
- “A rising tide lifts all boats” — or does it?
- “It's time in the market that is more important, because we can't time the market” — the market professionals who tout this one obviously know nothing about technical analysis.
- “Sell in May and go away”.
- Show me a list of Blue chip shares — are they really “blue chip”?
- Public floats — a great way to make money (not!).
- In Australia, a correction or bear market happens on average every 2.9 years, and the market takes an average of 3.2 years to recover to new highs.
- And did you know that the share market is like an elephant?
Many people believe that it is worth holding blue chip shares through thick and thin for the long term, and that it is not possible to “time the market”. But it will come as a surprise to many to hear that even blue chip stocks can devalue by 50% and more during a bear market, and that market corrections can occur quite frequently — and the market can take 3 years or more to make new highs. If only we could spot these market aberrations and avoid them with little effort, we could greatly improve our portfolio returns.
Robert will describe the extent to which portfolios were decimated by the last GFC with reference to a specific sample portfolio. He will also describe a simple technical analysis approach to avoid this in future.
The field of Technical Analysis is very, very broad, and covers many different aspects. The newer people to Technical Analysis can easily be surprised at the large variety of different studies. It can take years to realise how broad it really is.
The October meeting of the Melbourne ATAA will be focussed on a broad overview of both Share Trading and Technical Analysis for newer members, as well as some very useful tips and details for experienced investors and traders. This session will be especially useful for the newer ATAA members and potential members, and will also include a brief overview of the range of products and services that the ATAA has to offer to members.
In this ATAA presentation Robert will deliver a much condensed version of his 4-hour Technical Analysis seminar, including snippets on each of the following topics:
- CHARTING BASICS (eg. bars, candles, lines, Stage Analysis, support, resistance),
- CHART PATTERNS (eg. double-top/bottom, head-and-shoulders, triangles, flags, pennants),
- CANDLE PATTERNS (eg. doji, harami, engulfing, piercing, Black Crows, White Soldiers),
- INDICATORS (eg. trend/volatility/momentum, Moving Average, Bollinger Bands, MACD, RSI, OBV, ADX, P-SAR), and
- Specialised topics like cycles, Fibonacci, Elliott Wave and Gann.
Of course, there isn't enough time to cover all these in detail, so it will be a fast overview of the broad field of Technical Analysis.