Millard on Channel Analysis

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Brian Millard. Millard on Channel Analysis

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Preface to this Edition

Preface to the First Edition

Chapter 1. Buy and Hold?

GAINS AND COMPOUND GAINS

BUY AND HOLD FOR A LONG TERM

MULTIPLE TRANSACTIONS OVER A LONG TERM

COMPOUNDING SMALL GAINS INTO LARGE PROFITS

FROM THE THEORETICAL TO THE ACTUAL

Chapter 2. The Nature of Share Price Movement. INTRODUCTION

ARE SHARE PRICES RANDOM?

Chapter 3. Trends in Share Prices

THE SHORTEST POSSIBLE TREND

TRENDS ARE CYCLICAL

Properties of Sine Waves

The Real World

The Effect of Random Movement on a Trend

Adding Cyclical Trends Together

CHART PATTERNS AND CYCLES

1. Support and Resistance Lines (Figure 3.12 (a) and (b))

2. Uptrend and Downtrend (Figure 3. 13 (a) and (b))

3. Head and Shoulders (Figure 3.14)

4. Inverse Head and Shoulders (Figure 3.15)

5. Double Top (Figure 3.16)

6. Double Bottom (Figure 3.17)

Chapter 4. Isolating Trends from Complex Movements

CALCULATING A MOVING AVERAGE

THE EFFECT OF DIFFERENT AVERAGES

AVERAGE DIFFERENCES

COMPUTER METHODS OF TREND ISOLATION

GRAPHICAL METHODS OF ANALYSING COMPLEX DATA: CHANNEL ANALYSIS

Chapter 5.Predicting Future Movement

DETERMINING THE CURRENT POSITION OF THE CYCLES BY COMPUTATION

PREDICTING THE FUTURE POSITION OF THE CYCLES BY COMPUTATION

DETERMINING THE CURRENT POSITION OF THE CYCLES GRAPHICALLY

Chapter 6. The Cycles Present in Share Price Data

AN ANALYSIS OF THE REDLAND SHARE PRICE

Movement of Less Than 53-Week Periodicity

Movement of Less than 103- Week Periodicity

Selected Cycles in Redland Price Data

Short Term Prediction from the Data

Longer-term Prediction from the Data

Prediction Using Channel Analysis

APPLYING CHANNEL ANALYSIS TO THE BUYING AND SELLING OF BAA SHARES

July 1993 (Figure 6.16)

February 1994 (Figure 6.17)

July/August 1994 (Figure 6.18)

THE ADVANTAGE OF DAILY DATA

July 1993 (Figure 6.19)

January 1994 (Figure 6.20)

July/August 1994 (Figure 6.21)

Chapter 7. The Relationship between Moving Averages and Channels. AVERAGES AS TEMPLATES FOR CHANNELS

COMPUTING CHANNEL DEPTHS

MULTIPLE AVERAGES

Chapter 8. Turning Points in Share Prices

SCATTER OF POINTS WITHIN A CHANNEL

GENTLY CURVED CHANNELS

SHARP TURNING POINTS

PROBABILITY METHODS

Chapter 9. Maintaining a Pool of Shares

Bass (Figure 9.3)

British Telecom (Figure 9.6)

General Accident (Figure 9.9)

Land Securities (Figure 9.14)

Legal & General (Figure 9.15)

Pilkington (Figure 9.16)

Reckitt & Colman (Figure 9.17)

Redland (Figure 9.18)

Unigate (Figure 9.23)

United Biscuits (Figure 9.24)

Chapter 10. Staying Disciplined

CAPITAL MUST BE PRESERVED AT ALL COSTS

NEVER ACT SOLELY ON ADVICE

NEVER PUT MORE THAN ONE-EIGHTH OF YOUR CAPITAL IN ONE SHARE

DO NOT PREDICT TOO FAR AHEAD

DO NOT ANTICIPATE SHARE PRICE TURNING POINTS

PROTECT PROFITS BY STOP LOSSES

Percentage Stop Losses

Fixed Amount Stop Losses

PROTECT AGAINST LOSSES BY STOP LOSSES

STAY WITH TOP SHARES

IGNORE DIVIDENDS

KEEP TRACK OF THE MARKET

Appendix. Addresses

Other Editions by the Author

Microcomputer Software

Отрывок из книги

Since Channel Analysis was first published in 1989 the technique is now widely used by private and institutional investors. It has become recognised as an excellent method for improving the timing of investments, thereby reducing risk to a minimum. It appeals to the small private investor who does not use a computer, but is content to draw charts and channels manually. It also appeals to the computerised investor, since software programs are available to carry out the channel calculations automatically.

Whichever method, manual or computer, is used by the investor, stress is once again placed on a totally disciplined approach as being the only way to make and hold on to profits. It is only through discipline that the investor ignores the inner voice that says that a falling share price will turn around if only more time is allowed. It is only through discipline that an investor avoids jumping in too early before a buying signal is confirmed. It is only through discipline that an investor ignores the torrent of investment advice in the press.

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Looking at the Grand Met share price in Figure 1.1 again, we can see some upward surges in share price which make good gains over time periods of up to about two years. These trends are displayed in Figure 1.2, and have been isolated by using a centred 41-week moving average as discussed in Chapter 3. Taking the rising part of the trends only, there are 13 such uptrends in the figure. In this chapter we are concerned only with the share prices at the time the trends started and when they finished. The beginning and end of a trend is signified by the changes in direction of the average.

The share prices at the turning points in these 13 uptrends are given in Table 1.2.

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