WD Gann Market Movement

How & Why Do Markets Move?

Of course if you know how and why markets move you can make money from emerging trends and Gann's philosophy was unique and very profitable.

So how do markets move according to Gann? Let's take a look

Why the majority of traders lose

There is one statistic that has remained constant since investment records were kept and that is:

The number of winners to losers has remained constant over time.

On reflection, this would seem a surprising fact; despite the massive advance in communications and economic forecasting tools, the ratio remains the same.
The conclusion from the above is that the successful trading is dependant on something else.

That something else is our trading psychology.

The Influence of Human Emotion

In trading psychology, two emotions that are constantly to the fore are hope and fear. One of the traders who recognized this was the legendary trader W D Gann.

"Hope and fear: I have written about this often in my books and I feel I cannot repeat it too often. The average person buys commodities because they hope they will go up, or because someone advises them, they will go up. This is the most dangerous thing to do, never trade on hope. Hope wrecks more people's lives than anything else. Face the facts, and when you trade, trade on the facts, eliminating hope"

"Fear causes many losses. People sell out because they fear commodities are going lower, but they often wait until the decline has run its course and sell near the bottom - never make a trade on fear"

Controlling Emotions

Gann, like all successful traders, realized that the only way to trade successfully was to remove emotion from trading, and trade on the facts presented.

To do this, he applied mathematical principles and was stunningly successful, amassing a fortune of over $50 million in his trading career.

Human Nature Is Constant - Exploit It for Trading Success

In conclusion, it doesn't matter what market you trade:

Commodities, stocks, currencies, or what type of trader you are, a day or position trader, the fact is, trading psychology influences the majority of traders.

If you can trade with a logical disciplined mathematical approach you can win.

To read more on Gann's specific methods click here



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