The ‘Stairway’ Trading Method | WD Gann's Trading Secrets, Forex, Gold, Indexes, Stocks and Commodity Trading Methods private association (2024)

FAQs

What is the Gann trade strategy? ›

Gann states that price and time are at their best when they rise or fall at a 45 degree angle relative to each other. To draw Gann Angles at different angles, you need to have a significant top or bottom. If prices are above the trendline, it is a bullish market. A bear market if they are below.

First, Gann Analysis is based on past market price data, this means that it cannot be used to predict future price movements with an 80% accuracy approx. There will always be some degree of uncertainty when using this theory.

There are certain basic ratios that are held. For example, if the price trend is up for 9 days at a stretch then it is likely to correct for 5 days at a stretch (Ratio of 9:5). Double bottoms and triple bottoms on a monthly chart after a minimum gap of 6 months is an indication of a fresh uptrend.

He called this pattern his “Rule of Four.” Simply stated, the Rule applies when we have four consecutive touch points on a trend line or Gann Angle. The fourth touch point is make-or-break. If the market breaks through (in this case, to the upside), we usually see a very sharp rally on the breakout.

Three highlighted profitable forex trading strategies are: Scalping strategy “Bali”, Candlestick strategy “Fight the tiger”, and “Profit Parabolic” trading strategy. How to choose: Choose a forex trading strategy based on backtesting, real account performance, and market conditions.

Gann's equation goes as follows: 1 x 8 = 82.5 degrees, 1 x 4 = 75 degrees, 1 x 3 = 71.25 degrees, 1 x 2 = 63.75 degrees, 1 x 1 = 45 degrees, 2 x 1 = 26.25 degrees, 3 x 1 = 18.75 degrees, 4 x 1 = 15 degrees, 8 x 1 = 7.5 degrees.

The Wyckoff Theory or Wyckoff method is one of the best blueprints when it comes to picking winning stocks, the best times to buy them, and the most effective risk management approach.

Gann based predictions of price movements on three premises: Price, time and range are the only three factors to consider. The markets are cyclical in nature.

Gann's students have stated that he left a fortune of $50 million (equivalent to $569 million in 2023) that he built by following his methods, but evidence of such a fortune is lacking. Alexander Elder, in his book Trading for a Living, said "I interviewed W.D. Gann's son, an analyst for a Boston bank.

Yes, some traders in the foreign exchange (Forex) market do combine the use of Renko charts and Gann analysis in their trading strategies. Renko charts are a type of price chart that is based on price movement rather than time, and they are used to filter out market noise and provide a clearer picture of price trends.

What is Gann and Fibonacci? ›

Fibonacci analysis is based on the principle that prices often retrace a predictable portion of a move. Traders use Fibonacci ratios and levels to identify potential support and resistance areas. Gann analysis uses geometric patterns and angles to identify potential price levels and time periods for market movements.

What Are Gann Indicators? Gann indicators, most notably Gann angles, are trading techniques developed by W.D. Gann. They are widely seen as innovative and still studied and used by traders today. Gann used angles and various geometric constructions to divide time and price into proportionate parts.

Gann believed the 45-degree angle is important and trends above it are strong and trends below it weaker. Gann angles are applied from price bottoms extending upwards or from price tops extending downwards. Other Gann angles include 2:1, 3:1, 4:1, 8:1, 1:2, 1:3, 1:4, 1:8.

Next, you need to draw a line from the pivot point at a 45-degree angle, which is the 1x1 angle. Then, you can draw other Gann angles by dividing or multiplying the 1x1 angle by 2, 3, 4, 8, or 16. For example, the 2x1 angle is half of the 1x1 angle, and the 4x1 angle is a quarter of the 1x1 angle.

Gann angles can be used to identify potential entry and exit points for trades. 3. Golden Ratio: The Golden Ratio is a special number that is found by dividing any two consecutive numbers in the Fibonacci sequence. This number is approximately 1.618 and is found frequently in nature.

Moving averages are one of the most basic yet effective trading strategies. They calculate the average price of a security over a specified period of time and smooth out price fluctuations, making it easier to spot trends.