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

Brainy's "4 Windows"
Share Market Analysis
Approach - Overview

The "4 Windows" share market analysis approach is a framework
intended for both new and experienced investors and traders
to firstly remind us of the breadth of technical analysis*,
and also to serve as a checklist to help us remember
key 
considerations for stock (and index) analysis.
 
* - Don't forget that share market 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.
You are here: Share Market Toolbox"4 Windows" Approach
Related information:
"4 Windows" Details; Technical Analysis

Introduction

There are many different ways to look at, and to study, the stock market - either an index, or a company.

The underlying sentiment of market participants is summarised in the price charts.
Known information such as company fundamentals and news and company announcements
are mostly already reflected in the price charts.
And once a share price uptrend (or downtrend) is underway, it is statistically likely to continue.

As you view the material below (and follow the links) on this topic
you will see how sensible this type of approach really is.

Overview - The "4 Windows" analysis method

For those people starting out at trying to understand the markets and price charts, and for those more experienced investors and traders, it is useful to have some sort of "structure" or "framework" around the body of knowledge on this topic for a couple of reasons. Firstly, it is useful to have a broad overview of the key areas of technical analysis to give us the complete picture, and to help make sure we don't ignore something that might be useful. Secondly, we can use this is a checklist to help us remember the key areas that we have individually chosen to utilise.

The "4 Windows" analysis approach utilises four different ways to "view" the price chart of an index (or a stock) and so literally gives us four "windows of perspective" about the performance of the index (or a stock). The diagram at right illustrates the high-level overview of this approach.
But note that we are not advocating that you over-complicate your analysis by doing everything that is described here. All we are doing is offering some analysis suggestions for consideration.

Window 1 - Plain price - Trends, Support, Resistance, and Chart Patterns
The uppermost window is to remind us that it is useful to eye-ball the plain price chart, and gain a quick feel for the presence (or absence) of any price trend, any levels of support and resistance, and any chart patterns. Many successful traders and investors utilise only the concepts depicted in this window, and they ignore the other three windows.

Window 2 - Big Picture & perhaps your favourite "strategy"
The second window is to help fill out an understanding of the "big picture". This can be done in a number of ways, and may include your own preferred specific approach or favourite strategy (such as cycle analysis, Elliott Wave, or Gann). And it is most important to zoom the chart out and view the longer time frames - because the market is like an elephant.

Window 3 - Chart indicators
This window is to remind us that the subject of technical analysis includes a range of chart indicators. Some people don't use any indicators because they believe the plain price chart tells them everything. But many people believe they can be very useful.

Window 4 - Volume
The bottom window is to remind us that the consideration of volume can be important.

It is important to point out that much of the field of technical analysis applies to the study of most financial instruments. The material here is written with share market equities in mind; but mostly also applies to other instruments (such as foreign currencies, commodities, etc.).

More details

For more information on this topic, see the detailed page...



The "4 Windows Analysis" approach
comprises four "windows", or
different ways to
view the price performance
of stocks (or an index).

Toolbox Members area?

More information about the TOOLBOX MEMBERS AREA.

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 2012-2015, R.B.Brain - Consulting (ABN: 52 791 744 975).
Last revised: 31 July, 2015.