Traders today may follow the gann analysis when trading in any market. Although this method refers to mathematical principles, it is basically used more on forecasting market trends and not on the trading activities per se. Just like Gann himself, traders can filter information about the market and concentrate on studying where the trend is going instead. As a trader, he made used of indicators that reflected the hourly, the daily or the weekly movements of the prices in the market.
The three day trend lines that he used indicate that a one-day line indicator may have more swings than the other two days. Traders can also ascertain the direction or the trend by looking into the highest and the lowest prices over a definite period of time. The Gann technique may be used by traders who would like to concentrate on the swing type of trading. There are specific swing patterns as well as retracement points that can be expected to happen in between given trading periods. Traders have to be keen in making moves once they are able to follow through the patterns of highs and lows.
Gann did not pay much attention to the opening or the closing positions when developing charts (Gann trading software), but instead he concentrated on marking the highs and the lows which he connected through a line indicator. Traders who would like to succeed in using his technique have to abide by the rules such as trading by the trend lines that are indicated. However, it is important for them to realize that even if their trend line indicates that the market is up, this may not actually reflect what is happening in the market at a given time. Traders though can decide to buy after they see that the market has confirmed that they indeed have a double bottom. They can sell on the other hand if the market confirms a double top.
There are still other rules that traders have to follow if they would like to be swing trader like Gann. It may take them some time before they can master this trading technique in order for them to earn higher profits from their activities. People who are new in the trading market can be aided by software programs that can help them in creating charts with accurate data. However, there is still a need for new traders to learn and to understand how they can benefit from using the Gann technique in analyzing the market trends.
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