W.D. Gann Trading Techniques - I

Gann Trading strategies

• Importance of number 3

Majority of moves will generally occur in time period of three - days, weeks or months.Never trade in the direction of the trend on its third day.

• Tops, bottoms and consolidations

* Tops usually take time to form. Spike tops are less common compared to spike bottoms. Tops are marked by extreme movements in medium and small stocks. They will rise by even 20% in a day. These are called blow offs. Because of this short-selling on extreme top is risky.
* Divergences will appear at the top but they cannot be used for timing the trade. Time cycles shall indicate when the actual reversal will start.
* In bull market watch for a correction which is greater in both price and time than the previous corrections in the move up. (Opposite in the downmoves).
* Highest probability of support is that the corrections in the uptrend will all be very close to equal.

Weak stocks will generally not rally until either a test of the first bottom..

Continue Reading