Brainy's Share Market Toolbox Brainy's
Share Market Toolbox
(public information)

The Share Market


Brainy's Share Market ToolboxBrainy's Share Market Toolbox - an arsenal of weapons to help you tackle the market.
Learn how to read share price charts and develop your own investing/trading strategy,
or learn about the investment strategies of others.

Most of the links below go to public pages, and
some of them go to the Toolbox Members' Area (MA*) pages - those links are shaded blue.

Remember to beware of the sharks in the ocean!

Brief notes before we start

Share market
tips and guidance

Looking for some tips and guidance to help you profit in the share market? Here are some interesting and perhaps thought-provoking ideas:

You already have
some shares?

And you want to monitor their performance and the broader stock market?
And you want to do it quickly and easily?
No problem. The links on the Portal page are useful for tracking and monitoring company performance, share prices, market progress and finance news.
Or you might be interested in charting software.

The Cynic's Corner

For anyone who might be a little sceptical about the finance industry, or their intentions, the following might be good reading:

All the details about
the share markets and market indexes

Quick Links

Robert's underlying philosophy.

The truth about blue chip stocks (at right)
 
About the share market (at right)
  • Share Market GEMS
  • ASX Trading Calendar
  • NYSE Trading Calendar
  • ASX Trading Hours
  • Global Markets - holidays
  • SPI 200 futures contracts
Market indexes and sectors (below)
  • General information
  • Which stocks in each index?
  • XJO - Top 200
  • XAO - All Ordinaries 
  • ASX indexes - Composition 
  • Index re-balancing
  • GICS Codes
  • VIX indexes
Getting started (below)
Analysis?

There are some options:- Fundamental, Technical or Funda-Technical? (see below)
 
How to pick Winners (below)
Risk Management
    see the details below...
Are you an investor or trader? (below)

Online Share trading and investing

Who can you trust? (below)
 
Seminars and Workshops (below)
 
More information (below)
  • Good text books 
  • Share Market GEMs
  • Share Market Toolbox
 
Are you Share Market Ready? 
 



And whatever you do,
beware of the sharks in the ocean!
Beware the sharks in the ocean.

Food for thought

Before you get too far through the great material below, here is a little more food for thought:

Can I invest my SMSF funds in the share market?

It might be possible to invest SMSF funds in the share market, either for the long-term or maybe for short-term profits. It depends on a few things, including the SMSF documented investment strategy. See some key information here in the Toolbox.

The (disappointing) truth about blue chip stocks

Did you realise that:
  • There is no strict definition of the term blue chip.
  • Blue chip stocks are not all they are cracked up to be.
  • Too many blue chip stocks fell significantly during the GFC, so any investor/trader who relied on good capital gains would have been disappointed.
  • Even blue chip stocks can tumble, and stay stuck below recent highs for years.
See lots of details and some real charts explaining all this about blue chip stocks.
And what's the conclusion? It might be worth spending a little more time to find investable stocks further down the list of stocks.


About the share markets

The Australian market

Australian market operators - Since late October 2011 there have been two share market operators in Australia (ie. an organisation which offers a facility whereby the orderly exchange of company shares and derivatives can take place):-

Aussie and overseas market operating hours and holidays

The ASX Trading Calendar (2014) - A list of the trading days/holidays in the current year, and early finishing times when appropriate.
 
Time of day on key world stock markets - Brainy's web page showing a list.

World market hours map (from www.forexpros.com)World markets hours diagram (at investing.com)

Operating status of some market exchanges
(at www.premiumdata.net)

Daylight savings time adjustments around the world 
at: wwp.greenwichmeantime.com

NYX Holidays and Hours - Holidays and hours for the coming months (formerly NYSE Euronext).

ASX Trading Hours and Market Phases - A list of the various phases that the market moves through in each trading day from the Pre-Open Phase through Normal Trading to After-Hours.

World holiday dates at investing.com.

Daylight savings date changes (at GFT.com.au).
Global markets upcoming public holidays (at GFT.com.au).
 
Web page portal listing lots of web pages for daily use to check on the market, and to help with research.

Share Market GEMS (summary list) - A summary list of cliches and infamous share market tips (is 2 pages when printed).
The Toolbox Members full version (MA*) includes more details and explanations for these share market GEMS.

Lotsa Web Links (MA*) - A pdf file listing over 200 different and useful web sites on a whole range of investing and trading topics.

Robert has more publications available. Some for free and others for just a very  modest fee. Many are free to Toolbox Members.

SPI Futures - Information about various ASX options contracts including the SPI (Share Price Index) futures contract, including the exercise timetable.


The share market indexes

See market index details and history for more information about:
  • General information about our share market indexes
  • "top stocks"
  • Market indexes and sectors
  • ASX Indexes - Composition - How are all the ASX indexes, and sub-indexes, made up?
  • Which stocks are in each index? 
  • XJO - S&P/ASX 200 index 
  • XAO - All Ordinaries index 
  • Index re-balancing - recent S&P news 
  • GICS codes (Global Industry Classification Standard)
  • Volatility Indexes (VIX) 
  • More S&P information about the Australian Market Indices.

Getting started

Okay, so you think you want to take more control of your investments, and perhaps to mange your investments with a more hands-on approach. And maybe even trade shares yourself. It can seem scary; but it doesn't have to be.

"Learning how to do it does cost time and money;
but it doesn't have to cost lots of money."


In very general terms, it is important to clearly understand a few things like:
  • How much money is available for investing (ie. the funds)?
  • How much time do we need to devote? - See a discussion on the balance of time.
  • Which asset classes do I want to spread the funds across?
  • What is my risk tolerance? Can I tolerate a lot of investing risk, or not? See the FiRT (Financial Risk Tolerance) table in Brainy's eBook pdf number ST-2180 (see the Member version, or the page-1 preview).
  • Do I want to take the sensible step of using Funda-Technical Analysis?
  • Investing Plan and Strategy - Who can help prepare a sound plan and strategy?
    See some tips for getting started, and more details in some of Brainy's eBook (pdf) Articles.
  • Professional advice - What about the appropriate professional advice to assist with planning and executing the strategy?
  • Practise, practise and more practise - It can be very useful to gain some confidence and experience in a safe environment. Use paper-trading to test out a strategy, or use back-testing and trading simulation to test a strategy more vigorously.
Are you Share Market Ready? Take a look at Robert's Share-Market-Ready checklist.

"Try to find someone who seems fair and honest,
and who seems to make sense (sensible investing)."


Interested in share price charts, and how to read them?  
Take a look at some charting software (like BullCharts), or
consider learning about Technical Analysis (ie. charting).

Some pointers

Many people who start out learning about charting suffer from information overload. Many people find that over a 2 or 3 year period they find out various snippets of information about charting (Technical Analysis), and their focus is distracted.

The investment clock.Investing in cyclical stocks? - One of the many strategies for selecting stocks for investment is to monitor the economic cycle, and the investment clock, and to select either cyclical or defensive stocks as appropriate. See a discussion on this approach.
 
Good / bad news can move share prices - Many investors realise that a good news announcement can move share prices, as can a bad news announcement. And a good news announcement can cause a company's share price to fall if the good news is not as good as anticipated.
 
Intrinsic value (fair value) - How do we determine the fair price for a company's shares? What about the quoted intrinsic value? See a discussion here...
 
IPO - Initial Public Offering - Are they worth investing in? Some research indicates that too many IPOs are under water for many months after listing. Anyone hoping for nice capital gains might be disappointed. See more details about IPOs...
 
Reporting / Earnings season can move stocks - The so-called reporting season (or earnings season) can produce news announcements which investors like, resulting in a share price re-rating upwards, or which investors don't like, resulting in a negative re-rating of the share price. Many investors watch the reporting season in America. Note that there is a key difference between the reporting season in Australia, compared to the USA, as explained in the following comparison.
Australian reporting season US reporting season
  • Half-year cycle - Most public companies report each 6 months. This means that companies will report either their interim results (or first half results), or their final results (full year results).
  • Year-end - Most public companies have a financial reporting cycle with year-end at 30 June each year, but many have a year-end at 31 December. There are a few companies who have financial year end at different times again.
  • Reporting period - These companies are required to report their latest 6-month finances within 60 days of the end of the period - end-August for most and end-February for many.
  • Quarterly cycle - Most public companies are required to report quarterly - ie. every three months.
  • Earnings season starts - Generally, each earnings season starts a week or two after the last month of the quarter. So, for example, for the December quarter (the three months of October, November, December), companies announce their earnings in January.
  • Season end? - Most companies have generally announced their earnings results within six weeks of the start of the season.
  • Alcoa (a large company and listed in the Dow Jones Industrial index) tends to kick off each reporting season (often in the second week of the month). This announcement is always anticipated and closely watched by analysts and commentators, and rightly or wrongly used as a barometer of the markets and economy.
Author Strategies - It is a very good idea to record your "preferred" ideas and methods for "analysing" the market. Then they start to crystallise. One possibility is to find a "famous" trader / author - someone whose ideas you like and feel comfortable with. This includes the likes of: Alan Hull, Leon Wilson, Stuart McPhee, Louise Bedford, Jim Berg, Frank Watkins, Daryl Guppy, Stan Weinstein. These people are all Australian-based (except Stan W), and they have all published a number of text books on the subject.
And the BullCharts software has implemented many of their ideas and strategies as either chart indicators, or market scans, or both. This implementation is referred to as Author Strategies - see more detail here...

But, one downside in heading down the track of reading books is that in a couple of years time you will probably have a head full of even more ideas and will be no closer to your goal. Many people find they have a bookshelf full of books, that are only half read.
  1. Be comfortable with spotting up trends and down trends.
  2. Start with the Weekly Market Analysis page in the Public area of the Toolbox. It includes just a small number of indicators - MA, GMMA, Momentum, and Twiggs Money Flow (TMF).These are key indicators, and very common (TMF not so common).
  3. Follow the comments that are "on" the charts in the Weekly Analysis for Toolbox Members every week (to do this you do need to view every chart so you can read the comments on the charts).  These are based on the items in point 2 above.  It is like an ongoing tutorial to help you understand these key indicators.

Why would I buy shares?

This is a good question. Some people prefer to invest money in managed funds, or directly into property, or maybe share options or futures, or perhaps forex (foreign exchange, currencies).

Many people keep it simple, and stick to Australian shares - something they can relate to, and which has some meaning for them. But before doing this we should ask ourselves why we are doing it, and have a sound plan.

A type of investment plan and strategy is extremely important. There are a number of eBook pdf Articles on (Share Trading) strategies here.

Analysis? - Fundamental, Technical, or
Funda-Technical Analysis

What type of analysis methods should we use? Fundamental analysis? Technical analysis? or what?

This a choice that befuddles many investors and traders.

Don't forget that
Price charts summarise the underlying opinions and emotions of the market participants.
Every chart tells a story. It pays to understand the stories in the price charts.

See more information about , technical analysis, and Funda-Technical Analysis.


How to pick winning shares/investments?

  • Stick with something you know. If you don't understand the product, then either learn more about it, or avoid it.
  • Successful investors tend to have a specific mindset.
  • Trends - If a stock's share price is trending upwards, then riding the trend can be useful. But if the price is trending downwards, then why but it? On the hope that it will stop trending down and turn up at some point? See Trends details below.
  • For more GEMS like these, see Brainy's Share Market Gems.
  • Take a look at Robert's Weekly Watch List - which he shares with Premium Toolbox Members.

Trends and Shares

Classical Dow Theory states that if a stock is trending, then the trend is in place "until it is confirmed to have ended". There is a Wall Street adage - "the trend is your friend". Brainy's "3Ways Rule (in 3Times)"Learn the characteristics of trends, and all about how to pick an up trend. If you can spot a trend, and ride the trend, it is possible to be profitable.
But you need to keep a good stop-loss in place.
See Brainy's "3Ways Rule" for details about trends.
 
** - More trend-spotting details here.

Emotion and psychology

The day-to-day and week-to-week performance of companies in the share market depends on the underlying mood and sentiment of all the investors and traders who participate in the market. When a company's share price rockets upward, or dives downward, it is because enough of the market participants have a strong enough view of the stock, or of the market generally, to cause the share price to move.

See more details about the emotion and psychology drivers of the share markets.

Which shares to buy?

Some people follow fundamental analysis, and buy shares in a company because they think they will go up in price. But is this sensible?

Some people buy shares based on the price chart alone - if the price is trending up, then they ride the trend because "the trend is your friend". This is based on Technical Analysis (also known as charting). There is a long list of eBook pdf Articles on Technical Analysis.

And some people go for a bit of both - we call it Funda-Technical Analysis. The first part of this strategy is all about choosing stocks from a list of quality companies. Stocks with a proven history of returning value on the shareholders equity, and which are not over-geared, and which are also likely to have improved earnings in the months ahead. More information in the eBook Article ST-2300 (MA*).

Support and resistance

The two terms support and resistance basically refer to price levels on a price chart where the share price has paused in the past, and where it might be expected to pause again in the future.
 
** - Read more here...

Exit strategies

The long-term buy-and-hold investor rarely contemplates selling an investment position. However, the astute investor/trader who wants to protect capital and capture profits carefully considers the possibilities for exit strategies, and ruthlessly implements the chosen strategies.
 
** - Read more here...

Stop Loss! - How to minimise losses

The humble Stop Loss can help us enormously to limit any losses, and thereby protect our hard-earned capital. This includes the notion of an Initial Stop, and a Trailing Stop.
 
But what is this thing, and how do we calculate a Stop Loss? 
** - Read more here...

Stock liquidity - avoiding illiquid stocks

If you are serious about protecting profits, and utilising techniques like a Stop Loss, then you need to be confident that when you decide to sell your stock there will be a buyer there to buy it. Some stocks trade only a few times each day, or worse still, a few times each week. This is not the sort of stock that we want to be holding.
 
Learn more about stock liquidity, and what the consistently successful traders and investors do in this regard. See more details here.

How to maximise profits?

There are two opposing points of view about profits, and how to maximise them. Some people set a profit target which might be an arbitrary percentage amount above the current price - say 20%. By selling out here for a profit, it is possible to keep the profit, but potentially miss out on a much larger profit.
 
Some people prefer to "let the profits run". By maintaining a sensible Stop Loss, and monitoring the position, it is generally safe (but not always) to let the profits run.
 

Above all - have a plan and strategy

It is very important to have a documented investing / trading plan, and one or more strategies.
See more details about plans and strategies...
 

Risk management

There are a number of important considerations under this rather general heading to do with the following topics:
  • Money can slip away - brokerage, commissions, slippage
  • Good money management rules:
    • Proportion of capital in any one position
    • The 2% Rule
    • Position size optimising
  • Stop loss
See more information about Risk management...

Share "trader" or share "investor"?

Are you "carrying on a business of share trading"? (in ATO terminology)

Are you a "share trader" or a "share investor"? This question often arises, and there is much published on this topic. The actual and precise distinction might get down to semantics such as your desire to "own a part of the company", as opposed to temporarily owning an item which you can soon sell for a profit. Many books with slightly differing views have been published.
 
Technically, a share investor typically holds shares for a longer period of time, and pays capital gains tax on any profit (or claims a capital loss on losses). On the other hand, the share trader typically holds shares for the short term with no consideration of the impact of capital gains, and might be happy to pay income tax on the profits.
 
However, the Australian Taxation Office is the body in Australia that will decide whether an individual is an "investor" or a "trader", and how any profits will be taxed (and how any losses might be dealt with). The defining criteria are  not clear.
 
See the Australian Taxation Office web site and more details with this Google search.


Online share trading and investing

These days, trading or investing online is all the go! But there are traps and pitfalls. Who can you trust? See the comments at right.
 
Without proper preparation, the trading/investing journey can be a very short one. Many people embark on trading or investing with little preparation, on the understanding that it is easy, and that the profits will flow. But the truth is that it is not so easy.
 
Proper planning and preparation includes a good Trading Plan, and a sound and tested Trading Strategy. Without this, you might as well be gambling. More information about plans and strategies is included in Robert's Articles.
 
Also see the section above on getting started, and ask yourself if you are really Share Market Ready? Take a look at Robert's Share-Market-Ready checklist.

Who can you trust?

While some operators are very trustworthy, there are some who are only concerned with emptying your wallet.
 
Here are some good questions for your financial adviser or stock broker.
 
Fads will come and go, and hype will sweep through the markets. And people will get swept up by a range of promises. There are many claims "it's easy", "make money in your spare time", "fulfill your dreams".....

But, beware of the sharks in the ocean!

Seminars and workshops

Robert periodically runs seminars and workshops to explain the share market and how it works. His Share Market Secrets seminar (aka Boot Camp) is a good starting place. Or his Blue Chip Price Chart Secrets seminar (aka Technical Analysis/charting introduction).

Why does Robert run seminars and workshops for a living?
and not stick to share trading? Here is the answer...

A quick word about some of the other courses and seminars, especially the free ones. Some of these trainers are touting a specific product, or an expensive follow-up training course (without naming any). So take care. By all means go along to the free ones - nothing ventured nothing gained.

More information

Good Books - There are many books available. Here is a short starting list, and a plug for a good book shop.

Robert's Share Market Gems and cliches - Robert has compiled a list of useful cliches and snippets of useful information about the share market. It has taken a few years to learn all this, but it is summarised here for you.

How about a Sensible Approach to Sensible Investing? Now, is that a good idea? Have you seen a sensible approach lately?

Are you ready for the next Bear Market? They come around faster and more often than we care to admit. Robert has prepared some notes entitled "Beware the Share Market Bears! - They are never far away".

Are you Share Market Ready? Take a look at Robert's Share-Market-Ready checklist.

Interested in share price charts, and how to read them?  
Take a look at some charting software (like BullCharts), or
consider learning about Technical Analysis (ie. charting).

Interested in seeing more eBook Articles about the Share Market, and Share Trading?  Details are here...

Share Market Toolbox - More information about Brainy's Share Market Toolbox - a great collection of useful articles, eBooks, charts, tools, commentary and web links to advance your understanding of the share market, no matter whether you are investing or trading.
 
How to become a Toolbox member - Information about how to become a Toolbox Member.

Brainy's Share Market ToolboxBrainy's Share Market Toolbox - an arsenal of weapons to help you tackle the market.

MA* - The information marked thus above is available to Share Market Toolbox Members only.
Becoming a Toolbox Member is easy, and not expensive (great value for money).
And there is also a Premium Member area with more detailed information for the keen Members.
Once you have your Toolbox Username and Password, you will be able to access the MA items above.

If you need something that isn't here, feel free to contact us to talk about the possibilities.

Robert can be available for lengthy discussions or information sessions about these things
for a very reasonable fee.

The information presented herein represents the opinions of the web page content owner, and
are not recommendations or endorsements of any product, method, strategy, etc.
For financial advice, a professional and licensed financial advisor should be engaged.


Home | DISCLAIMER | Contact us
Copyright 2006-2014, R.B.Brain - Consulting (ABN: 52 791 744 975).
Last revised: 22 September, 2014.