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Gann Angles - The Secret of Better Market Timing for Big
Profits!
W D Gann
was an innovator in technical trading systems and made fortune of over 50
million dollars Gann died in 1955, but his methods live on and traders around
the world use them for big profits.
Gann angles are a
tool used by many savvy traders Quite simply Gann angles allow you to pinpoint
your entry and exit levels for great profit potential. Let’s look at the
effectiveness of Gann angles.
Gann based his investment strategy on the
fact that by studying the Past, We Can Predict the Future. He assumed the
following:
1. Price, time, and range are the only three factors
relevant to market movement.
2. Markets are cyclical in nature.
3. The markets are geometric in their design and in function. Gann knew
that market movements were a reflection of human nature which is constant over
time, and this shows up in repetitive price patterns that can be seen with the
right tolls and traded for profit.
Gann’s techniques & use
of angles
Based on the above, Gann's used three ways to predict
market behavior
1. Price study– This uses support and resistance
lines, as well as pivot points and angles.
2. Time study – This
looks at historically reoccurring dates derived from natural order.
3.
Pattern study – This studies market swings using trend lines and reversal
patterns.
Gann Angles
Using Gann angles requires
practice, but here are the basics of what you need to do
1. Determine
the time units - The way to determine a time unit is to study charts and look
at the distances in which price movements occur.
Put the angles to the
test and see how they perform.
The intermediate time frame (between 1
and 3 months) tends to produce the best amount of accurate patterns and is the
time frame to focus on, rather than say, daily or multi year.
2.
Determine the high or low from which to draw the Gann lines –
The
best way to achieve this is to complement it with other technical tolls such as
Fibonacci levels or pivot points.
Gann looked at what he referred to as
"vibrations" or "price swings." He found these by analyzing charts using tools
such as Fibonacci numbers.
After the above has done you then need to
decide which pattern to use:
Gann looked at what he referred to as
"vibrations" or "price swings." He found these by analyzing charts using tools
such as Fibonacci numbers.
After the above has done you then need
to decide which pattern to use:
1. The two most common patterns are the
1x1, the 1x2, and the 2x1.
These are purely 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 and the slope.
2. Look for
patterns to trade the direction will be either downward and to the right from a
high point or upward and to the right from a low point.
3. Always look
for repeat patterns on the charts The whole basis of Gann’ theories are
that markets are cyclical in nature and patterns repeat and can be traded.
Using Gann Angles for Trading Profits.
Gann angles
are great for predicting support and resistance levels.
Many other
trading methods use support and resistance lines; however Gann angles add a
greater insight for traders - in that they are diagonal.
The best
Gann Formation.
The optimum balance between time and price is when
prices move identically in synch to time. This is present when the Gann angle
is at 45 degrees.
There are nine different Gann angles to use.
When one of these lines is broken, the following angle will then
provide the next level of support or resistance.
Gann made a lot of
money, a fortune in fact of over 50 million dollars and Gann angles helped him
to do it, so discover what they could do for you today!
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.
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