Subject: Brainy's FREE BullCharts TipSheet #10
Brainy's BullCharts* TipSheets
Number 10
Published: 20 March 2009

Dear Reader,

Welcome to the 10th edition of my (fortnightly) BullCharts software Tip Sheets, focussing on tips and hints regarding the Australian BullCharts charting software package.

I am happy to receive feedback and suggestions for these Tip Sheets.

Which version of BullCharts are you running? We are now up to version 3.8.1. The last couple of updates over the last year or two (version 3.6, and 3.8) have included some nice new features. See more details below.

Over the last 2+ years that we have been running the BullCharts User Group meetings in Melbourne, there have been a lot of tips and hints discussed by user group members around the table. And people often ask "how can I do xx in BullCharts?". I am including some of those tips in these Tip Sheets. Of course, if you attend the meetings then you also get to here a lot of other information about the market, trading strategies, and various seminars and books that people have encountered.

In this Tip Sheet edition I cover a couple of BullCharts tips from recent User Group meetings including: how to display currencies, and how to show two stocks on the one price chart - as you would with studying prices for pairs trading (from the Feb 2009 meeting). Pairs Trading was discussed by the TCT staff in the Trading Blox presentation at the last meeting.

Also, the next edition of my monthly e-Newsletter is due out in the next week. The Share Market topic will be an introduction to the strategy topic of correlation (of stocks, indices, markets). You can click here for more details about Brainy's Monthly eNewsletter articles (on Technical Analysis, Share Trading and BullCharts), and to view all the articles in the first one, or a preview of each month's articles.

Please feel free to send me feedback, or requests for additional topics .

Good luck with your trading.

Robert ("Brainy") Brain
(Contact details below.)

Topics in this week's Tip Sheet:
  • TCT Strategy Session - 25th March in Brisbane
  • BullCharts version 3.8.1 (beta)
  • Show Axis - Left, or Time
  • Display currencies
  • Chart two stocks together (or indices or currencies)
  • More information
  • This TipSheet might look strange?

  • BullCharts version 3.8.1 (beta)
    Click here for a larger image.

    If you look at the BullCharts web site home page, there is a brief list of the latest Announcements. This includes a note about the Current Versions of BullCharts. And today the note there says that version 3.8.1 (beta) is available. There are also some instructions there on how to get this latest version.

    This latest version 3.8.1 is being referred to as a "beta", but that is just because it has not yet received very thorough absolute testing. It is basically a warning that there might still be a bug in the product.

    But I would not worry about this. I have been running v3.8.0 since about last October (as an official BullCharts user tester). And I have been running 3.8.1 for a couple of weeks now. I am very happy with the product, and the new features.

    Just briefly, v 3.8.x includes a couple of nice features including: a "Workspace Manager" to manage your BullCharts Workspaces. If you are not sure about Workspaces, then stay tuned for the next Tip Sheet where I will cover it in detail, including the v3.8.1 aspects.

    Other new features include Price Alerts. That is, you can set a price point on a price chart, so that BullCharts will alarm after the price is reached. This is very useful for end of day, or weekly, traders/investors. Intraday traders can also use this feature by downloading data snapshots during the day, and scanning for alerts based on the latest snapshot.

    Show Axis - Left, or Time
    Click for a larger image.

    Sometimes it can be useful to display a price axis on the left-hand side of the price chart. By default, this is not displayed.

    Right-click the mouse anywhere around the middle of the price chart - not over the top of an axis.

    >From the drop-down menu choose "Show Axis" (see the accompanying screen shot, and click on the diagram for a larger image). Select, or deselect, any of the options listed.

    Note that the left price axis that is now displayed shows the same price values as on the right hand axis. This is to be expected when you are displaying only one stock. I find this useful on a larger screen where I am studying price action to the left of the chart. But when you display more than one stock (or index or currency), you can display a different scale of values on one axis compared to the other.

    Note that one of the options here is to uncheck the Time Axis option, so that the time axis is not displayed. Now you might not be able to think of any reason why you might do this; but the option is there.

    Display currencies
    Click to see a larger view.

    It is possible to display a number of "currency pairs" in BullCharts (17 at last count). Don't forget that when we talk about trading currencies, we are talking about a "currency pair". That is, one currency compared to another; eg. the Australian Dollar and US Dollar.

    This question came up in last month's Melbourne User Group meeting, and we demonstrated how to do this.

    To display this currency pair in BullCharts, make sure the "Security" toolbar is displayed. When it is not docked with other toolbars around the edge of the BullCharts window, it looks like as in the accompanying screen shot. If this is not displayed anywhere around your BullCharts window, then check on the menu option: View > Toolbars, and see whether the "Security" toolbar option is ticked.

    While you are checking this, have a quick look at the many other toolbars that are available. It is easy to tick and untick any of these just to see what they are.

    In the Security toolbar field, type in the characters: $.AUDUSD and hit the enter key. It might take a moment, because this data is not stored on your computer, so the BullCharts software needs to send a request over the internet to the web site to get the data, and bring it back to display it.

    For a list of other currency pairs, see the BullCharts Help. You can hit the F1 key in BullCharts, then type currencies in the Search field (not the Index field). It should display a list of 17 currency pairs.

    BTW - Notice that the "Security" toolbar field is actually a "drop-down" so that you can see a list of recently viewed securities. The number of securities that are displayed in this list can be adjusted - see the menu option: Tools > Preferences > General (tab) and the option "Number of recent symbols". I have mine set to 30.

    Chart two stocks together (or indices or currencies)

    There are situations where you might want to display two stocks on the one price chart.

    For example, you might want to compare the price performance of two banks, and buy the bank that is currently the weaker of the two on the assumption that over the long term they will become similar. That is, you might want to buy the bank that has been under performing the other. (WARNING - This is not a guaranteed strategy, and is not recommended without thorough testing.)

    This is a topic known as correlation and pairs trading, where you do some research to see how well two similar stocks perform when compared to each other over the very long term. If your research shows that two particular stocks do correlate each other over the long term, then you might take on the view that they are closely correlated. In which case you might then "pair trade" these two stocks. If you are interested in this topic you should study it some more before implementing such a strategy.

    Now, let's say you have correlated two big mining stocks like BHP and RIO. The accompanying chart shows these two stocks over a few months from December 2008 to late March 2009.

    To get a chart with two stocks, firstly display one price chart (eg. BHP). Then from the BullCharts menu use: Insert > Security (or hit Ctrl E on the keyboard). In the dialogue box to enter the second security, carefully note all of the following options:

    • Parameters tab - the Symbol (ie. security or stock code which can be in index like the XJO, or a global index like "US.^DJA", or a currency pair). Also the Period - you can put a Weekly chart onto a Daily, for example.
    • Style tab - Note the Plot type - you can have one plot as a Line and one as Candles. And you can change Line Thickness for a contrast between the two price charts.
    • Location tab - By default, this second security will want to go into a New Pane. If you really want it overlaid on top of the first security, then you need to select that price pane here.
    • Colour tab - You can change the "Colour Method" (fiddle with this if you are not sure what it does), and also the Colour of the Security. A different colour will help it stand out. In the sample chart shown, BHP is in black, and the second security (RIO) is shown in red.
    • Scale tab - This is important if the two securities being charted have different price ranges, as with the BHP and RIO sample here. BullCharts always displays the price of your first security on the right-hand price axis. When inserting a second security, it is wise to select the option "Display new scale on left". But, do note the other options on this list, including "Spread...", and "Relative Strength Comparison".
    In the sample price chart shown here, note the following features:

    • BHP is shown in black, and RIO in red.
    • Left-hand price axis is RIO, and right-hand is BHP.
    • In the title bar across the top of the chart, BHP is named first along with its C-O-H-L price details (as it was the first security I displayed, and RIO was "inserted" on the BHP price chart). The details in green "+0.930 +2.98%" are the price change since the previous bar in dollars and percentage. As it is a daily chart, these are the changes since yesterday's Close.
    • Along the right of the title bar, RIO is named, and its C-O-H-L price details in the colour that matches its price chart (in red).
    • Unfortunately, BullCharts cannot at this stage set the two price charts to be exactly on top of each other at a specific date. What it does do is simply fit the two charts as best as possible into the chart window - this is something that BullCharts is good at. So, be careful when looking at the actual price range of the two securities. You can see on this chart that BHP is ranged from about $27 to $33.50 (about $6.50) while Rio has ranged from about $32 up to about $52 (about $20). So just keep this in perspective. It would be good if both could be set to the same "range" with just an offset for one of them.

    More information

    More details on some of the topics in these Weekly Tip Sheets are included in Brainy's Monthly eNewsletters that are available to subscribers (for a very modest amount). Feel free to click on the relevant link at right to view samples and more details.

    These weekly Tip Sheets for BullCharts* users are intended to be short, quick grabs of information. They are not a replacement for the monthly detailed Brainy's eNewsletter articles, which cover these same topics but in much more detail. The eNewsletters articles also cover Technical Analysis and Share Trading topics.

    Also see the BullCharts on-line help (in BullCharts, hit the F1 key), and the relevant User Guide Chapter for more details (this is supplied with the software and copied to your hard drive as a PDF file).

    Note: Any screen shots shown in this newsletter are snapped from BullCharts version 3.8.

    FEEDBACK? - I am very keen to receive feedback about these weekly BullCharts Tipsheets. Please feel free to email me with comments, or suggestions. Contact details are included below.

    * - BullCharts is: " innovative charting and technical analysis system. It provides a feature rich and powerful set of tools with access to the latest strategies from local and overseas authors in analysing the dynamics of the stock market."

    This TipSheet might look strange?

    This TipSheet has been composed in HTML and distributed using an online service, and is intended to be viewed in HTML (ie. web language) format. Some parts might look a little strange, especially if you are viewing a basically text-only version. I am working on a text-only version.

    We have also found that some web-mail clients (eg. Hotmail and Yahoo mail) can mess up some aspects.

    Please feel free to send me feedback if anything looks strange.

    Good luck with your trading.

    Robert ("Brainy") Brain

    TCT Strategy Session - 25th March in Brisbane

    How to maximise profit and reduce risk in today's market environment.

    TCT Australia is a company I work with in supporting traders and investors with various training courses, seminars and workshops. They recently ran a 3-hour workshop in Melbourne in early March (on a Wednesday evening) on the topic of Correlation and strategy. And there is a Strategy session taking place in Brisbane next Wednesday evening 25th March.

    Find out how people like you, perhaps with limited knowledge about the world markets, are BUILDING WEALTH and beating the "professionals" at their own game!

    • Learn about a simple, low risk, low effort market strategy.
    • See a system that is up 80% in the current market.
    • Find out how to build a LOW RISK, market beating Portfolio.
    • And it applies to all levels of understanding - novice and advanced.
    Visit this web page for more details and to register.

    Or you can register to receive free Trading Videos and the TCT Newsletters, and find out first hand about future workshops in Melbourne and other locations around Australia. See the general TCT web site link below for details.

    TCT Australia specialises in providing training and mentoring to traders. Their best selling product is the Live Trader Program (LTP), which includes some theoretical online video training, and 5 days of hands-on realistic and mentored trading practise in their trading room (using a practise trading account with $100,000 of play money).

    Feel free to contact me for further details about this program. Or talk with the TCT staff, and tell them you heard about the program from Robert Brain. If you are keen to do the LTP program; but the price might be a stumbling block, then call me and we can talk about the possibilities.

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