The W.D. Gann Method of Trading: A Simplified, Clear Approach (Gerald Marisch, 1990)

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  •  Retracement of 50%, 63%, 75% and 100%
  • Gann: Level - Percentage - Degree - Angle - Support/Resistance
    • 1/8 - 12.5 - 14 - 1x4 - Support
    • 2/8 - 25 - 26.5 - 1x2 - Support
    • 4/8 - 50 - 45 - 1x1 - Neutral
    • 5/8 - 62.5 - 63.5 - 2x1 - Resistance
    • 6/8 - 75 - 75 - 4x1 - Resistance
    • 7/8 - 87.5 - 82.5 - 8x1 - Resistance
    • 8/8 - 100 - 90 - NA - Resistance
  • Gann and Geometric Angles: Angle - Gann (Price vs. Time) - Geometric (degrees)
    • A - 1x2 - 26.5
    • B - 1x1 - 45
    • C - 2x1 - 63.5
    • D - 4x1 - 75
  • Gann's 50% retracement rule
    • After an initial, sustained price move, either up or down, prices retrace to 50% (4/8) of their initial move. If the retracement exceeds 50%, prices should continue to the 62.5% (5/8) level, before a reaction occurs.
  • 63º line
    • In a rising market, never lower your stop from its current level.
    • In a falling market, never raise your stop from its current level.
  • Gann rules
    • Prices will significantly react at the 50% retracement level.
    • If prices exceed the 50% retracement level, the next level at which they will react is the 62.5% retracement level.
    • If prices exceed the 62.5% retracement level, the next level at which they will react is the 75% retracement level.
    • If prices exceed the 75% retracement level, the strongest level of support or resistance will be the 100% level.
    • Support and resistance levels also occur at multiples of 50%, 62.5%, 75% and 100%.
  • Some tips
    1. Use only risk capital - money you can afford to lose.
    2. Know your broker.
    3. Learn from all the material that's available.
    4. Learn from your mistakes.
  • Gann's rules
    1. Trade for the long term.
    2. Trade with the trend.
    3. Trade for a reason.
    4. Trade at the market.
  • Final tips
    • Commodity tradings is a deadly-serious venture. Vast amounts of money can be made - and lost - in a matter of minutes.
    • For this reason, learn as much as you can about trading before entering even one trade.
    • And once you enter that trade, never assume anything about price movements and trends.
    • Never trade on hope and fear. Know why the trade is being made.

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