Calculations of WD Gann

CreditViolet · #11 8th October 2006, 12:51 AM

Marcus
I would suggest you to take a look into Patrick Mikula's couple of books on Gann. Most of Gann's work is directly or indirectly based in astrology and planetary alignments. If one already has a profitable method I would suggest you to take a look into them, there are some great ideas in them.Otherwise its not a good idea as it would take a lot of time to go through them to make sense of all the ideas he presents.
For an introduction to Gann's works I would suggest Bill Mclaren's book Gann Made Easy. Also Gann's last book How to make profit in commodities is a good read. There is a lot more in it than is obvious in the first read.

Good luck
CV

Linus · #12 8th October 2006, 09:35 AM

Hi Markus,

Nice topic indeed. Some say Gann was a fraud,some really use his methods.You will be surprised to know that a group in the U.S.of A, thinks that man never landed on the Moon,and the whole thing was a set up by Nasa! So we will never know the truth about Gann.

Anyway, I do believe in the basic assumption that there is an order in this Universe and everything has a rhythm of its own, be it an electron or a stock.

Gann made a observation on gaps on weekly charts that is interesting:for a gap up on a weekly chart, draw two trendlines through the gap from the nearest top and see where the trend lines meet on the price axis -that is the level prices will come down in future !

Regards,

Sunil Saranjame aka Fibo.

ksganesh100 · #13 19th October 2006, 10:36 AM

As someone already said in this thread, Gann used a lot of esoteric methods to trade. A lot of these methods were aimed at forecasting the market action. But on a more personal note, forecasting the market is something I am not comfortable with and I would rather follow the market.

Having said that , I do like/use one particular Gann technique to set stop losses for my long positions. I think these are are called 2-day and 3-day swing charts, but the name does not really matter. How it works is very simple. You exit a position when the scrip makes two consecutive lows. If you want to give your scrip a little more room, then you might want to sell it when it makes three consecutive lows. It all depends on how tight you want your stop to be.

When I first read about it, I found this method a bit too simplistic to work effectively. But when I went through some charts, it seems to hold up effectively in a nice trend. And it is nobody's business to hang on to a not so nice trend

How I like to use it in practice is - wait for a low < Yesterday's low, then put a hard stop a little below the low for tommorow's trade to avoid it being gunned.

A trade where I used it recently is attached. I was very suprised to note that it held for a good 25% gain after I entered the trade - which can be thought of as a "home run" for swing traders.

Ofcourse, like all stops, this is not perfect. But again, think in terms of probabilities and you have a pretty good method of exiting positions here.

Similar Threads for: Calculations of WD Gann
Thread	Thread Starter	Forum	Replies	Last Post
Gann Analysis	purvija99	Technical Analysis	2	12th January 2005 09:41 PM
Who Is W.D. Gann	RajK	Technical Analysis	3	11th January 2005 04:08 PM