# Practising Charting Skills



## bonkerrs (21 May 2009)

Just practising my chart skills. How does this look for using a support/resistance line and BBand?

From the chart:
It looks like the SP has bounced off the support line 3 times indicating that it looks to be a strong support line.

A triangle is forming... I'm not too sure about this one though - a little wide on both ends.

Bollinger Band - widens on the bottom where there is an up trend and widens on the top where there is a down trend. Gets tight when in a sideways trend. Left the setting as it appeared. Don't know what settings to change to (for short term).

How did I go?!:


----------



## beamstas (21 May 2009)

my opinion...


----------



## saiter (31 May 2009)

beamstas said:


> my opinion...




Beamstas, are you using elliot waves? If so, I thought wave 3 was meant to be the largest?

bonkerss, I don't think there is a "correct" way to read a chart (apart from the really basic stuff like what is an upwards trend -> higher highs, higher lows etc.)

I too would say that the pattern is too wide for a triangle...

I'm not too sure about the support being really strong either. My interpretation would be that people are buying the stock at the "support" thinking that the price is going to break through the "resistance". There also seems to be evidence of the stock trying to break through (wide ranging bars approaching the resistance) but its just not getting there (it has done this twice by the way). This leads me to believe that there is heavy selling at the resistance and that it's heading downward...


Btw which stock is this?


----------



## beamstas (31 May 2009)

saiter said:


> Beamstas, are you using elliot waves? If so, I thought wave 3 was meant to be the largest?




Nope
It just can't be the shortest

It's not EW anyway (well... theoretically)

Its just a PPS triangle


----------



## bonkerrs (1 June 2009)

saiter said:


> Btw which stock is this?



BSL

On the weekend, I looked at charts for hours. Just trying to figure out when patterns form and trying to work out how to look for it.


----------



## Sean K (1 June 2009)

BSL?

This may all depend on the charting service. For posting here I use Big Charts.

I'm confounded how EW was made to fit this, but anyway.

Potential double bottom for a start. Good news. Looks like good support at $2.00 ish.

Clear downtrend line is looking to be attacked. Potential breakout.

I don't think this is going anywhere but down or sideways until the significant horizontal resistance at $3.00 is breached. 

WTF! with the volume?


----------



## beamstas (1 June 2009)

kennas said:


> I'm confounded how EW was made to fit this, but anyway.




Who said anything about EW?


----------



## kam75 (1 June 2009)

I use Price, Volume and OBV to gauge the market.  I'll look at support and resistance zones and see what the volume is doing.  OBV tells me whether it's buying pressure or selling.  Rising OBV tells me accumulation is taking place.  Don't use any other indicators except a simple MA on the occassion.

I think your Bollinger Bands may definitely be of use.  They're not a bad indicator.


----------



## Sean K (1 June 2009)

beamstas said:


> Who said anything about EW?



So, it's a PPS triangle? 

OK


----------



## beamstas (1 June 2009)

kennas said:


> So, it's a PPS triangle?
> 
> OK




Maybe it's time you read a book


----------



## Sean K (1 June 2009)

beamstas said:


> Maybe it's time you read a book



Thanks. I'll read that one. Everyone else will be too, I'm sure.


----------



## Aussiest (1 June 2009)

kennas said:


> Thanks. I'll read that one. Everyone else will be too, I'm sure.




Yeah, i'm champing at the bit to read whatever book that is. Of course, fundamentals and news items have nothing to do with a share price. Not to mention the supply and demand (of steel in this case).


----------



## beamstas (1 June 2009)

If you are insisting on making stupid remarks about eliott wave before even reading the thread then at least make sure you are familiar with what you are talking about?






Im sure you have enough fingers to count 5 internal points there

If not i can post another very basic chart for you that you may be able to understand


----------



## Aussiest (1 June 2009)

beamstas said:


> If you are insisting on making stupid remarks about eliott wave before even reading the thread then at least make sure you are familiar with what you are talking about?
> 
> 
> 
> ...




Wow, all i said was there is more to the SP than historical data. Eg, supply and demand of the particular commodity and the companies fundamentals.

No need for the childish remarks.


----------



## Sean K (1 June 2009)

Aussiest said:


> No need for the childish remarks.



He's making childish remarks toward me Aussie, so no drama.

Seems a simple question can't be answered with a simple answer.

I'm seeing a pattern forming.

A PPS pattern....


----------



## beamstas (1 June 2009)

kennas said:


> He's making childish remarks toward me Aussie, so no drama.
> 
> Seems a simple question can't be answered with a simple answer.
> 
> I'm seeing a pattern forming.




Yes, i labelled a pps triangle, which as you would know (since you are the authority who either accepts a chart or makes a smart **** comment about it) has 5 internal points and then breaks continuing with the trend.



			
				kennas said:
			
		

> I'm confounded how EW was made to fit this, but anyway.




Simple - it wasn't
Your assumptions were wrong.



			
				Aussiest said:
			
		

> Yeah, i'm champing at the bit to read whatever book that is.




PPS trading strategy by curtis arnold


----------



## Sean K (1 June 2009)

beamstas said:


> PPS trading strategy by curtis arnold



Ah, OK. One of those. Thanks! How hard was that?


----------



## beamstas (1 June 2009)

Post #4


beamstas said:


> Nope
> It just can't be the shortest
> 
> It's not EW anyway (well... theoretically)
> ...




Post #6


			
				kennas said:
			
		

> I'm confounded how EW was made to fit this, but anyway.




Post #17


			
				Kennas said:
			
		

> Ah, OK. One of those. Thanks! How hard was that?


----------



## Aussiest (1 June 2009)

beamstas said:


> (since you are the authority who either accepts a chart or makes a smart **** comment about it)




Wow, i am entitled to my opinion! And you want to talk about antagonistic comments? You're one to talk.

Refer to WEEP0's "view to a kill" thread:

Beamstas: "ASF is full of bull****
This is one such example of it" 

and


"Now go back to never doing anything with your life other than spending the rest of it trying to pick bottoms and getting sadly dissapointed

You can really tell who are the big swinging dicks on this forums and those who arn't

Those who arn't start threads claiming that they are the best thing since sliced bread and they can't make a wrong call

Those who are actually spend time trading and ignore bull**** posts like this

If you want respect
Go to hotcopper

Because you won't get any here
The people here have seen your type 1000's of times and are not impressed"

This is hardly manners is it?


----------



## beamstas (1 June 2009)

Don't even know why you are on this thread aussiest
None of my posts have been directed at you


----------



## Aussiest (1 June 2009)

beamstas said:


> Don't even know why you are on this thread aussiest
> None of my posts have been directed at you




It's an open forum Brad. I'm sure none of WEEP0's posts were directed at you and you still contributed.


----------



## Sean K (1 June 2009)

Aussiest said:


> It's an open forum Brad. I'm sure none of WEEP0's posts were directed at you.



He's abusing me Aussie, not you, so no dramas! I really love new members abusing me.


----------



## beamstas (1 June 2009)

Aussiest said:


> It's an open forum Brad. I'm sure none of WEEP0's posts were directed at you.






			
				Aussiest said:
			
		

> Yeah, i'm champing at the bit to read whatever book that is. *(note i had already said)* Of course, fundamentals and news items have nothing to do with a share price. Not to mention the supply and demand (of steel in this case).




Why'd you post this then?
I had already said i labelled it as a PPS triangle
I have no ideas of the fundamentals of BSL and i don't care to tell the truth

I was simply giving what i said was *my opinion*

Now do i have to keep saying the same thing over and over or is it going to sink in?

Next time you jump on a thread and start firing off posts -- read it first


----------



## beamstas (1 June 2009)

kennas said:


> He's abusing me Aussie, not you, so no dramas! I really love new members abusing me.




Go back through the thread
You are the one who jumped on with an attacking comment to deface my post
(Even though i had already clarified my analysis)

Anyway -- i don't have time for this

I've stated the reasoning behind my analysis, and it was exactly that, an analysis. Obviously the price action has proved me wrong and that is fine


----------



## Sean K (1 June 2009)

beamstas said:


> Why'd you post this then?
> I had already said i labelled it as a PPS triangle
> I have no ideas of the fundamentals of BSL and i don't care to tell the truth
> 
> ...



Can we have a discription of a PPS triangle? 
Doesn't seem to be in this thread. 
Maybe a link somewhere?
Cheers.


----------



## Sean K (1 June 2009)

beamstas said:


> Go back through the thread
> You are the one who jumped on with an attacking comment to deface my post
> (Even though i had already clarified my analysis)
> 
> ...



Obviously you have no time for this.


----------



## beamstas (1 June 2009)

kennas said:


> Can we have a discription of a PPS triangle?
> Doesn't seem to be in this thread.
> Maybe a link somewhere?
> Cheers.




Sure
A price consolodation that has 5 internal points and "coils" ie: the price action comes into a very tight range, and the volume drops off. When the triangle breaks it is on very high volume and is a powerful move. 

Obviously in a downtrend the triangle theoretically should break downwards. High volume is also bearish as it indicates there is still plenty of supply.

The link i provided is a fair enough description --  they are outlined in much more detail in *Curtis Arnolds PPS Trading Strategy Workbook*

Not sure about a link, as im not sure you can get the workbook free on the net anywhere, i'll have a look.


----------



## Aussiest (1 June 2009)

Aussiest said:


> Of course, fundamentals and news items have nothing to do with a share price.




I was being sarcastic. Know what that is?

I commented on the thread because i wanted to. Get it?

My opinion is that fundamentals and news releases affect the share price. No 'firing off' here 

Sorry Bonkerrs..


----------



## beamstas (1 June 2009)

Aussiest said:


> IMy opinion is that fundamentals and news releases affect the share price.




*Thread Title: *Practising Charting Skills 

You are in the wrong thread then sweetie


----------



## Aussiest (1 June 2009)

beamstas said:


> theoretically should break downwards




Just as a matter of interest, why all this theory? You have posted elsewhere that you know nothing about some of the companies you have been paper trading.

Do you not think that fundamentals and news releases play into the SP? (no, i think you have already answered this one).

Do you not think that psychology also plays into it? Do you not think that humans can act irrationally and sometimes drive the price up or down?

I am actually really curious as to how you think somebody can trade purely from charts? And, no, this is not a TA vs. FA question. It is merely a personal question directed at you.

I am actually geniunely curious!

Does it not disturb you to know nothing about a companies fundamentals?


----------



## Aussiest (1 June 2009)

beamstas said:


> *Thread Title: *Practising Charting Skills
> 
> You are in the wrong thread then sweetie




Aussie Stock *Forums*. I'll go to any thread i like "sweety"!

"Sweety"? Where'd you get that from?!


----------



## Sean K (1 June 2009)

Aussiest said:


> My opinion is that fundamentals and news releases affect the share price. No 'firing off' here



This is an interesting discussion, but probably for another thread.

The market is about perception and expectation so anything outside of the expected, or perceived, could be good or bad.

The news releases you might describe could send a stock either way depending on expectations and percepions, less black swan events.


----------



## beamstas (1 June 2009)

Aussiest said:


> Does it not disturb you to know nothing about a companies fundamentals?




Don't know what you are saying about paper trading
I show my results on a paper trading situation in my own thread -- but i do actually trade them.

To answer your question -- no.

*Currently holding*
IAU
TRY
IVC
IPL

I know TRY is Troy Resources -- that's the only name of those i know
I don't know what they do
I don't know what sector they are in
I don't know any recent news
I don't know what their market cap is or what their balance sheet looks like

Today has been a relaxing day +6% on holdings
Market is up +1.6% so im not complaining 

Can i ask you a question?
Why do you feel the need to know the companys fundamentals?


----------



## Aussiest (1 June 2009)

beamstas said:


> Why do you feel the need to know the companys fundamentals?




I don't feel the need, i like to know roughly what the company is about.


----------



## Sean K (1 June 2009)

OK, gents, please. This is purely about charts.

No fundamentals required.

Let's move on.


----------



## Trembling Hand (1 June 2009)

Aussiest said:


> Do you not think that fundamentals and news releases play into the SP? (no, i think you have already answered this one).
> 
> Do you not think that psychology also plays into it? Do you not think that humans can act irrationally and sometimes drive the price up or down?
> 
> ...




Aussiest What are you talking about??

I trade index futs without even knowing how many companies are in that index let alone if they make any money or not 

I would be really interested in seeing 10 of your trades bases on news announcements.

EDIT: Maybe you could start another thread and show us.


----------



## Aussiest (1 June 2009)

Trembling Hand said:


> Aussiest What are you talking about??
> 
> I trade index futs without even knowing how many companies are in that index let alone if they make any money or not
> 
> I would be really interested in seeing 10 of your trades bases on news announcements.




Good point TH, you got me there. Although i would say that you could trade the SPI with if you had been watching the market, was up to date with the US and news events (and economic data) with some certaintity couldn't you? I mean, you're either bullish, bearish or in between. You wouldn't just go and trade the SPI with no market knowledge would you? That's what you're suggesting i did.

Trades based on news announcements? Don't know if i'd make a trade based on a single news announcement, but news announcements over time add up and contribute to the share price.

The  "dead cat bounce or recovery" thread is a good example. Part of this 'recovery / dead cat bounce' is based on data and news from the US. You can't say that it isn't.


----------



## beamstas (1 June 2009)

Aussiest

Have you ever wondered why share prices don't go up on great news? They always seem to do the opposite?

Fundamentals and "News" are not 100% certain
Price Action Is. Price action doesn't lie

That is why i prefer to look at the actual chart rather than market "perceptions"

News goes on tonight.. someone gets a rave review and all the mums and dads jump in thinking they are getting a killer buy

What they don't know is that they are already trading against the big guys who probably have a dedicated news feed and have already traded accordingly, waiting for the mummies and daddies to buy so that they can sell into them.


----------



## Trembling Hand (1 June 2009)

Aussiest said:


> You wouldn't just go and trade the SPI with no other market knowledge would you? That's what you're suggesting i did.




Well you are wrong. I can make 100s of trades a day roughly 50/50 long/short.

So tell me how is that is influenced by what happened the day before in the US or any other market. If it was then it would be all longs or all shorts. In fact my only interest in yesterdays events are to what degree I will fade them not follow them.


----------



## Broadway (1 June 2009)

Hey Bonkerrs,

That stock looks to be following the general indexes.
And looks like alot of volume since the early march bottom we had across all markets.
Looks like accumulation to me.
Keep watching it, and if the next dip finds good volume then I would be tempted to enter with that volume.

But you may want to check the company is solid, and making money as well.

Good luck.


----------



## beamstas (1 June 2009)

Broadway said:


> Keep watching it, and if the next dip finds good volume then I would be tempted to enter with that volume.


----------



## bunyip (1 June 2009)

kennas said:


> Can we have a discription of a PPS triangle?
> Doesn't seem to be in this thread.
> Maybe a link somewhere?
> Cheers.




Kennas

That pattern in BSL doesn't fit the true description of PPS triangles, which tend to form over a much shorter time, just a couple of weeks in most of the examples in the PPS book. 
They're characterised by four separate points consisting of two highs and two lows.
The attached charts show a couple of examples.

Somewhere in this forum there's a thread called 'PPS Trading System by Curtis Arnold' - it's worth a look - some good examples of PPS triangles and other PPS patterns are included in that thread.


----------



## nunthewiser (1 June 2009)

saiter said:


> Btw which stock is this?




could be any of 100,s even the xao/xjo.. one may notice that many currently have roughly the same pattern


----------



## nunthewiser (1 June 2009)

kennas said:


> He's abusing me Aussie, not you, so no dramas! I really love new members abusing me.




sounds almost saucily naughty



kennas said:


> Obviously you have no time for this.


----------



## skc (1 June 2009)

kennas said:


> BSL?
> 
> This may all depend on the charting service. For posting here I use Big Charts.
> 
> ...




If I had to trade this chart (as of today) it would be long based on the very substantial volume in the past week. But I probably won't trade it given that there is no reasonable low risk point to set up stop loss, and substantial resistance at low $3ish.

If looking at the chart as it was originally posted, I would also not trade it although I would favour a break to the down side as suggested originally by Beamstas.

I guess what I am trying to say is reading chart is one part of trading, but the chart pattern also need to provide a decent set up from a risk reward point of view.




Aussiest said:


> I don't feel the need, i like to know roughly what the company is about.




I agree with you here. I do it for 2 purpose:

1 - Not having too much exposure to a single sector. E.g. every coal share is looking good on the charts at the moment. But I won't want to have 50% of my open positions on that 1 commodity. You never know that the Chinese communist party might announce an Earth Month where they black out Beijing or something like that.

2 - To see stocks that can hold up fundamentally. I will increase my risk if I am more confident based on the fundamentals.

Of course, with scalping the SPI there is no point following any news. The only thing about news is to know when they will be released. Same with FX.



kennas said:


> He's abusing me Aussie, not you, so no dramas! I really love new members abusing me.




10,000 post vs 600. Go easy on the hot blooded noob would you...


----------



## beamstas (2 June 2009)

skc said:


> 10,000 post vs 600. Go easy on the hot blooded noob would you...




400

As you'd know. Posts don't mean everything.


----------



## skc (2 June 2009)

beamstas said:


> 400
> 
> As you'd know. Posts don't mean everything.




Your post count is 590. I was rounding up.


----------



## beamstas (2 June 2009)

skc said:


> Your post count is 590. I was rounding up.




yours


----------



## ceasar73 (2 June 2009)

kam75 said:


> I use Price, Volume and OBV to gauge the market.  I'll look at support and resistance zones and see what the volume is doing.  OBV tells me whether it's buying pressure or selling.  Rising OBV tells me accumulation is taking place.  Don't use any other indicators except a simple MA on the occassion.
> 
> I think your Bollinger Bands may definitely be of use.  They're not a bad indicator.




Hi Kam

I read Stan Weinsteins book...he doesnt mention OBV. Where can i find more info on this indicator? I think I saw it mentioned in one of Larry Williams' books..does he use it?

thanks

ceasar73


----------



## kam75 (2 June 2009)

ceasar73 said:


> Hi Kam
> 
> I read Stan Weinsteins book...he doesnt mention OBV. Where can i find more info on this indicator? I think I saw it mentioned in one of Larry Williams' books..does he use it?
> 
> ...





Actually Larry Williams has developed his own indicator which he reckons is better than OBV.  He discusses it in his "Long Term Secrets to Short Term Trading."  I'd be interested to hear from anyone that has tested it.

Been a few years since I read Weinstein.  OK but he talks about volume, volume expanding on a breakout etc.  Similar thing except OBV helps you identify whether it was buying pressure or selling.  Still think his is the best book on technical analysis out there.  Actually he was asked to write another book but he said there's nothing else to write about because 'it's all there' in his book.  

Don't know where else you could have a read about OBV but I think investorpedia would have plenty of info.
regards


----------



## ceasar73 (3 June 2009)

kam75 said:


> Actually Larry Williams has developed his own indicator which he reckons is better than OBV.  He discusses it in his "Long Term Secrets to Short Term Trading."  I'd be interested to hear from anyone that has tested it.
> 
> Been a few years since I read Weinstein.  OK but he talks about volume, volume expanding on a breakout etc.  Similar thing except OBV helps you identify whether it was buying pressure or selling.  Still think his is the best book on technical analysis out there.  Actually he was asked to write another book but he said there's nothing else to write about because 'it's all there' in his book.
> 
> ...




Thanks Kam.

I agree , Weinsteins book is great - I like that he keeps it simple and that he didnt need to write another book.

cheers,

ceasar73


----------

