 |
Gann Management Ltd- Celebrating 28 years of
continued success!
|
Telephone 0161 285 4488 | Fax 0161 494 6432 | Email
info@gann.co.uk |
|
Predicting the Market Using Gann Angles -
An Alternative Slant on Market
Timing.
W D Gann was a prolific writer and trader, and
created a fortune of over 50 million dollars (equivalent to 500 million
today!).
Many of his trading predictions were the subject of public
record.
For instance, he correctly predicted the 1929 crash a year in
advance! Gann died in 1955, but he still holds legendary status as a technical
innovator.
By predicting the market using Gann angles, you can add a
valuable tool to your trading strategy.
Assumption: By Studying the
Past, We Can Predict the Future
Gann based predictions of price
movements on three premises:
1. Price, time, and range are the only
three factors to consider.
2. The markets are cyclical in nature.
3.
The markets are geometric in their design and in function.
Gann believed
that human nature was constant, and this showed up in repetitive price patterns
that are identifiable, and which can therefore be acted upon to increase profit
potential.
Gann's Strategy for Trading Success
Based on the
above assumptions, Gann's strategies revolved around three areas of prediction:
1. Price study- This study uses support and resistance lines,
pivot points and angles.
2. Time study - This studies historically
reoccurring dates derived from natural order
3. Pattern study -
These study market swings using trend lines and reversal patterns.
Constructing Gann Angles
Predicting the market using Gann
angles requires subjective judgment and practice.
Here is what you need
to do:
1. Determine the time units - One common way to determine
a time unit is to study the chart and look at the distances in which price
movements occur. Then, put the angles to the test and see how accurate they
are. The intermediate-term time frame (one to three-month) tends to produce the
optimal amount of patterns compared to short term daily, or multi year
charts.
2. Determine the high or low from which to draw the Gann
lines - The most common way to accomplish this is to complement it with
other forms of technical analysis i.e. Fibonacci levels or pivot points. Gann
used what he called "vibrations" or "price swings." He determined these by
analyzing charts using theories such as Fibonacci numbers.
3. Decide
which pattern to use - The two most common patterns are the 1x1, the 1x2,
and the 2x1. These are simply variations of the slope of the line. For example,
the 1x2 is half the slope of the 1x1. The numbers simply indicate the number of
units.
4. Look for patterns - The direction would be either
downward and to the right from a high point or upward and to the right from a
low point.
5. Look for repeat patterns on the chart - The basis
of this technique is the premise that markets are cyclical.
Using
Gann Angles for Trading Profits
The most common use for Gann angles
when predicting the market is to indicate support and resistance levels. Many
other trading methods use support and resistance lines, so what sets Gann's
method apart from the rest?
Quite simply, predicting the market using
Gann, angles add a new dimension to support and resistance levels, in that they
can be diagonal.
The Optimum Gann Formation
The optimum
balance between time and price exists when prices move identically to time.
This is present when the Gann angle is at 45 degrees.
In total, there
are nine different Gann angles. When one of these trend lines is broken, the
following angle will provide the next level of support or
resistance.
Learn More about a Legendary Trader
Why not
attend one of our FREE Seminars held in London and cheshire.
click here to book on-line or telephone 0161
285 4488.
|
RING 0161 285 4488 TO BOOK YOUR
FREE SEAT AT ONE OF OUR FORTHCOMING SEMINARS OR CLICK HERE
TO BOOK ON-LINE.
© 2008 Gann Managament Ltd.
All Rights Reserved. Gann Management Limited is authorised and Regulated by the
Financial Services Authority.
GML Company Reg Number: 2069317 GML VAT
number: 616003878
All information on this website - www.gann.co.uk are
subject to the terms of this:-
DISCLAIMER. |
|
