W D Gann Trading Methods Explained

W D Gann's innovative approach was based upon a technical approach to trading markets and he worked on the principle that human nature was constant and in the charts he could see:

"What happened in the past will happen again"

Gann then looked for recurring patterns in these chart for trading opportunities.

The Law Of Nature

Gann was a prolific writer and presented his thoughts and trading techniques in numerous books and courses. Some of his ideas were empirical studies, while many were mystical in nature.

Gann's view was that certain laws governed not only the markets, but nature as well, and were universal in scope.

The Concept of Price and Time.

Gann's most important contribution to investing and trading was probably his concept of time and price and the interaction between the two.

Gann believed that crucial price movements occurred when price and time converged.

These convergences usually indicated an important change was imminent and traders could trade for profit when a convergence occurred.

If price and time were not in synch however, or did not converge, then time was always more critical than price.

Time, was seen by Gann as the ultimate timing indicator and he believed, all of nature was governed by time.

To quote Gann:

"Just remember one thing, whatever has happened in the past in the stock market and Wall Street will happen again"

Advances in bull markets will come in the future, and panics will come in the future, just as they have in the past. This is the working out of a natural law"

"It is action in one direction, and reaction in the opposite direction. In order to make profits, you must learn to follow the trend, and change when the trend changes"

Trader psychology was therefore the key to repetitive price patterns.

Gann's Other Innovations

Gann contributed many original ideas and innovative techniques to the trading world such as:

Swing trading, Gann angles, the Fibonacci number sequence and the golden ratio and many more, however his major contribution to the investing world was his insight into on investor psychology.

His insights into the emotions of hope, greed, and fear and how they caused traders to lose, are informative and support his theory of recurring market behavior.

One of his most famous quotes which is just as applicable today as it ever was is:

"We cannot escape it (emotion). In the future, it will cause another panic in stocks. When it comes, both traders and investors will sell stocks, as usual, after it is too late, or in the latter stages of a bear market"

This is only a brief overview of the logic behind Gann's methods, as he wrote numerous books on trading amounting to several thousand pages. The logic however is soundly based and this is reflected in the number of traders all around the world who are making profits with his methods today.

Gann Trading Methods Put Them To Work For You!

If you want to increase your potential profits then put Gann's proven techniques to work for you and become a better, more informed and more profitable trader.



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