DrBourse TA Help for Beginners

[DrBourse]

Firstly – page 35 (below) “Other Candle Signals”….


Now look at the ALD Chart below… it shows where most Amateurs would place a Support Line.


Now look at the next ALD Chart…. It shows (as explained on page 35) where they should have placed their Support Line…

 

[DrBourse]

For the Second explanation I need to refer to page 19 “Inverted Head & Shoulders”..


In the Chart below we see that the correct Support is actually the Neckline of an” Inverted Head & Shoulders Formation”…..

 

[DrBourse]

For the Third explanation I need to refer to pages 203 to 212 “Gaps”..



The “Gap Down” on 25/10/22 in the Chart below is within the Linear Regression (LR) – that alone presents a Minor & a Major Resistance Line that controlled the SP right up until 15/2/23. And now that Gap Top Line becomes a Minor Support Line, and the Gap Bottom Line becomes a Major Support Line.

 

[DrBourse]

So to Summarize…

You need to take all the above into consideration when looking at TA for ALD…..

Linear Regression with its Buy Zone, Sell Zone, and its 3 Support/Resistance Lines (pages 139 to 142).

A Gap Down, with its 2 Support/Resistance Lines (pages 203 to 212)..

The Head & Shoulders Formation, and it’s very important Support Line (page 19)..

The possibility of a Benchmark Candle Formation within the LR (9/1/23 to 25/1/23) (pages197 to 199)..

AND there are a few more considerations such as Candle Colours, Candle Addition, Candle Momentum, and Indicator movements and Divergences, etc, etc….

YES THIS IS COMPLICATED – SO, BASICALLY, IF YOU CANNOT FOLLOW WHAT’S HAPPENING WITH THE TA FOR “ALD”, THEN YOU SHOULD PROBABLY TRY A DIFFERENT PROFESSION…..

AND THIS IS JUST A MINOR LOOK AT SOME OF THE TECHNICAL ANALYSIS PROCESS….


Then we can move onto the complicated area if Financial Analysis and Intrinsic Valuation Calculations…

Good Luck with all that - Happy to Answer any Questions...
Cheers...
DrB.

 

[DrBourse]

As I've mentioned previously, if anyone wants copies of the pages that I continually refer to, please contact me via the "Start Conversation" Private Massage Facility.

 

[DrBourse]

Been watching this formation for a few weeks now, so thought I would put the WDS chart up to test the “Thinking Beginners” out there in the ASX Sandpit…..

It started back on 1/6/22, BUT it changed on 17/1/23, and it is still current today ….. It is an example of “Overlapping Benchmark Candle Formations” (pages 197 to 199)……..Note that the RED parameters change to BLUE when the 2nd BCF forms….

ALSO, the CCI may be heading for a SHH (pages 109 & 109), that SHH may reach a CCI 260+ (the last SHH of 230 was back on 19/7/22), that could put the ST SP @ about $39.26, which, if that happens, could create another Benchmark Candle Formation High……

Then if all that happens, what would you do??……

Yes, this is complicated, it is not meant to be easy….Just look at the Overall Picture…..

The snapshots below may help your understanding…..





Cheers.....
DrB.

 

[Rabbithop]

Jjust

i already have a comfortable amount of BHP ( i even resisted joining the DRP )

to ME , BHP ( currently ) looks to me like a 'serial stumbler ' much like modern WOW

i would be ( currently ) more inclined to add the profits in extra S32 ( and MAYBE even part of the OZL proceeds , when they arrive )

as i think i need a little extra growth in my portfolio ( to help resist inflation )

now oil price .....

i see a disconnect coming as much of the OPEC+ production will circumvent the Petro-dollar and therefore the major commodity markets ( Singapore might be a BIG winner here ) funneling much refining activity to India and China

will the oil rice become just as notional as the 'official' gold price ( very different from what the retail buyer can take it home for )

BTW i do not debate Dr. B's calculations , only what I would do if they come true

i also notice an uptick in talk about uranium , keep an eye on BHP to see if they expand Olympic Dam , there is a useful amount of uranium there ( allegedly )

Re reading this heading n today i/3/23, Uranium seems to be baking HOT.

 

[Rabbithop]

Dr Bourse Message for NEWBIES…

This post is for the “Wanna-be” Newbie Share Traders…..

The following may seem harsh to you, but I'm trying to stop you losing money….

Basically there is a lot to learn about this industry, but IMO you HAVE started off with the correct approach, by asking questions….



Here are a few suggestions for you to contemplate…

These are in no particular order…..

I’m just going to drop suggestions one after the other as they come to me…

What Tier Data Provider do you use, Tier 1, 2, 3 or 4 - depending on your trading time frames, some of us could have bought and sold the share you want to buy, 2 or 3 times before you get your data, so be careful what Share Trading Platform you use….



You need to know what certain “external events” have on stocks, particularly when they happen outside Trading Hours – for example how do stocks react to Interest Rate Changes, or to Commodity Price changes – for example a Mining Stock may rise or fall when Iron Ore or Gold prices change, but Health Funds may not react….



How will you identify a Positive History – Companies only issue Financials periodically through the year – any Financial or Rumour effects on a Companies Financials are interpreted differently by various analysts – which one will you believe – or are you able to dissect a Balance Sheet ….

A Stocks History over 12 mths is irrelevant… A Stocks History is normally 5 to 10 years….Which of the approx 50 Ratios and/or 30 Margins of Safety would you be looking at to help evaluate a Positive History??..Which of these Buffett style calculations would you be using to help your evaluation of a stock:- DDM, DDMF, GIVF, PRESVAL, RIV, ERI, NCAV, PAYBACK, PEG, PEGY, STRET, STRETD, TARG, TARGD, EGROWTH, ESAFETY, PESAFETY, (there are several others)….



Do you know what the overnight “ASX SPI” is, and how it will effect todays Share Prices….

Do you understand how Stocks react to certain Political Decisions....

Do you know what time the Economic Clock is ATM....

Do you understand the S&P Credit Rating System for Companies (AAA, BBB, etc), and what those ratings mean to a Company….

Do you know what ‘Minor Irritants’ such as Algorithmic Traders, Swing Traders and Option Traders do and how they effect a companies share price…

Do you know IF your chosen Stock CAN be Shorted…

Do you understand how Short Selling effects your chosen Stock….

Do you calculate your own “Intrinsic Values” – if not why not??..

Do you know what Australian ADR Stocks are - do you know how they effect their Australian equivalent....

Do you check Overseas Exchanges to see how Australian Dual Listed Stocks performed yesterday, their + or – for the day is usually reflected here in Aust…

Check out the NCM Stocks on the Dow Jones – Start by searching for NCMGF and NCMGY…



Don’t Trade too many stocks at the same time, it is not easy, while you are winning and watching your profits grow on say 2 or 3 of them, the others can quickly reverse and obliterate any profit you thought you may have had….

Why not trade 2 or 3, have all 3 charts and all 3 Market Depths on multiple screens at the same time, and watch them “like a hawk”….



Don't take tips on face value…

Be careful of forums like Hot Copper (BS could be a better abbreviation for some posts there). There is gold to be found in all stock forums but sometimes you have to sift through a lot of less desirable gold coloured material to find it!....



Paper trade for 6 months to prove you are not going to lose your money….



Don't gear your investments with products like CFD's unless you really know what you are doing. My recommendation is don't gear - full stop…..



Get some education in trading so you can do your own research and not become a lemming (ie follow someone else over a cliff)…..



Beware if trading a performing sector, as it is more likely to become an underperforming sector much sooner than most of us expect….most of us are already in those “performing sectors”, we are just waiting to sell our holdings to you….We have already used our Tools of Trade to get into performing sectors before they started to rise in value, we have also used those tools to evaluate an approximate “Exit Point”….



Be careful if you decide to trade for “Dividends Only”, The ATO likes Traders/Investors with that approach…



What timeframe are you looking at to carry out your Technical &/or Financial Analysis over….

For Technical Analysis what do you know about Charts, or Chart Indicators, or Candlesticks etc…..

For Financial Analysis what do you know about Ratios, or Margins of Safety….

Do you understand Balance Sheets, can you correctly interpret the figures they quote…..



What type of charts are you using, Linear, Log or Arithmetic, Each Chart Type produces slightly different outcomes when conducting Chart Analysis…..

Do you understand Technical Analysis Tools like Charts & Indicators, do you understand how to read them, do you understand what they are telling you…?

Do you use any other indicator over or on top of your Chart or Basic Indicators – if not, why not…

Personally, I use several indicators on all my charts, IMO that gives me several different points of view on the Technical Merit of a stock – why would you only rely on one….



IMO, Traders should not get too involved with STOP LOSS points - I do not use a Conventionally Accepted STOP LOSS or TRAILING STOP LOSS System….I feel that those systems belong to the Longer Term Investors….Once I have in my opinion, enough Signals/Signs from my Tools of Trade, I will act immediately….For example if a Bearish Candle Pattern and/or my Indicators suggest that a pullback or downtrend is imminent I will follow those signals and exit the Trade immediately....If I were to use a % Stop Loss System (of say 2%) and my Tools of Trade gave me enough signals to exit for say 0.5%, I would be crazy to hold and watch any small loss be increased just because that “% Stop Loss System” told me I had to wait till my losses reached that magical 2% - it would be easier to just give some money away....Admittedly I sometimes exit a trade early – but I prefer to be cautious – and if my Tools of Trade suggest continued uptrend then I can easily re-enter the Trade....- the idea is to trade when there is a trade to be made, and even then you should 'Play the Trade' (like playing a Fish), you should not trade the $$$'s - get the trades right and the $$$'s will automatically follow…



Do you know what the “ASX staggered Open Times are”.

Do you know what the “ASX Pre-CSPA Times are”.

Try this site Cash market trading hours (asx.com.au) .

Do you know what Candle Construction is and how to interpret it…?

Do you know what Tick and Intraday Charts are and how they relate to Daily Charts……?



Emotion and Intuition are very useful in this industry – do not disregard either one...

Experienced traders do NOT make money off fellow Traders – We profit from mistakes made by Newbies…

Let me know when you master all of the above aspects of this profession – I will then post the more complicated 10 pages of “what you need to know” if you are going to dabble in this Sand Pit.

Good Luck...

DrB.

Dr B...? you are frightening the newbies off. So so so much to read understand n digest or is it to retain in the memory bank.

 

[rcw1]

Good afternoon Dr Bourse
Be most appreciative if you could run your TA ruler across AGG please.


Kind regards
rcw1

 

[divs4ever]

Dr B...? you are frightening the newbies off. So so so much to read understand n digest or is it to retain in the memory bank.

you could always try to sweet-talk Joe Blow into adding a bookmark feature to member's accounts

so folks ( especially novices and newcomers ) can find memorable posts easily

some posts deserve immortality

 

[DrBourse]

Good afternoon Dr Bourse
Be most appreciative if you could run your TA ruler across AGG please.


Kind regards
rcw1

OK NP, sometime later this arvo

 

[peter2]

There's already a bookmark function in ASF.

 

[DrBourse]

There's already a bookmark function in ASF.

View attachment 153845

Hi peter,....Thnx for that.....will have a look at it over the W/E....

 

[divs4ever]

There's already a bookmark function in ASF.

View attachment 153845

awesome , i hadn't discovered that feature either

thanks for that

 

[peter2]

Dr Bourse has posted a valuable resource here on ASF for chartists and tech analysts (I've even noticed some FA info as well).

There is A LOT.
My suggestion for beginners is to focus on one or a few ideas only and research them for yourself. Can you make the ideas pay?

One of my many bookmarks in this thread is the idea of containment candles posted a few weeks ago. Opposing candles (bars) can contain price for a little while but price will break out sooner or later and the move is usually a strong one. I like the idea of the setup and bookmark the post (#159). The reason I like the idea is that the reward is bigger than the risk in a bullish market.


Now the plan is to find instances of two consecutive candles (one up and one down) that contain price for 1 - 5 bars. The top and bottom form the "box" (similar concept to Darvas box trading).

I noticed one this week on LTR. Once the top and bottom of the "box" are formed we place a conditional buy order to buy when price trades above the top price.
eg Buy LTR when it trades at 1.38 (limit 1.39). The initial stop loss is placed at the bottom of the box (1.28 or 1.27).



This post outlines the process but any trading idea is not proven by only a few results. Do twenty and see if you can make the idea work for you.

If you're interested in trading via price charts then you've a lot of work to do. Find an idea, test it properly and review your results.

 

[peter2]

Following on with this "containment" idea. Here's a chart with price contained by one bar and hasn't broken out yet.

CXO is a future lithium hydroxide producer and price really moves when sentiment for lithium stocks is bullish.

The top is 0.98, bottom price 0.91. Note: I won't buy at 0.99 but would rather buy above the significant level of 1.00.
My conditional buy order would be Buy CXO when price trades at 1.005 (limit 1.01) with an initial stop loss exit at 0.90.

 

[DrBourse]

There's already a bookmark function in ASF.

View attachment 153845

Hi peter..... where/how do we access existing Bookmarks......DrB

 

[rcw1]

awesome , i hadn't discovered that feature either

thanks for that

@divs4ever and @dr_bourse you silly sausages …, ha ha ha

Even rcw1 knew that …. Ha ha ha

 

[Sean K]

Hi peter..... where/how do we access existing Bookmarks......DrB

DrB,

Bookmark function here.

No idea how the Message and Labels option work, but something to do with a search algo.

 

[DrBourse]

DrB,

Bookmark function here.

No idea how the Message and Labels option work, but something to do with a search algo.

View attachment 153853

DrB,

Bookmark function here.

No idea how the Message and Labels option work, but something to do with a search algo.

View attachment 153853

Hi sean...
Yep always known that Icon was there....just had no idea what is was....

So what happens to the Bookmark after you Label it etc.....is there a list of existing Bookmarks that anyone can access.