1. Jesse Livermores Secret To Success
4. How to win in the stock market
5. Commandments to follow
6. 10 Rules for Investing
7. How to survive a stock market crash
8. William J ONeil, CANSLIM
9. Dan Zanger, Wyckoff mark up trader
10. Barry Ritholtz keep it simple stupid
11. Gerald Loeb how to win
15. Chuck Hughes 7 times World Trader Champion
18. Indicators Introduction
19. Richard Wyckoff method
22. Wyckoff method improved1
23. Wyckoff method improved2
24. Original Wyckoff and Wyckoff 2.0
25. Wyckoff 2.0 vs Others
26. Wyckoff 2.0 and Volume Spread Analysis
31. Cycles for short term speculation
37. RTT Wyckoff Short Term model
40. Proprietary Indicators (PI)
45. PI: RTT Rainbow Bands
48. PI: Proprietary Indicators Caution
William Gann method
The originator of this method is from the writings of William D Gann (1878-1955)
|From the age of 13, Gann traveled the trains selling cigars and newspapers. In so doing, he overheard many conversations on investing—he listened. Gann wondered if it were indeed possible to predict the future. Many conversations he had overheard seemed to revolve around predicting the prices that their cotton would bring. Was it possible?|
Gann moved to New York in 1903 at the age of 25 and began working at a major Wall Street Brokerage house. During the First World War, he and his family moved from Manhattan to Brooklyn. Gann reportedly predicted the November 9, 1918 abdication of the Kaiser and the end of the war.
W.D. Gann began by studying the basic principles of price patterns and philosophy on how to accumulate wealth, and keep it. After becoming successful, he wanted to know why and how markets, and numbers repeated under certain time cycles. This led to further studies of ancient geometry and astrology.This research led to Gann accumulating over 50 million dollars up until his death on the 18th June 1955 **.
** While there is some debate on Gann final fortune, it is widely accepted that Gann was most successful early on in his career, it is known that he accumulated profits over $100,000 in the 1950s using methods that we also like to use: Angles, percentages, support and resistance.
Gann methods are all about geometry within a price time series, all his methods are designed to find the influential geometry within a price chart. Gann technical tools include angles, lines, circles, cycles, percentages, square of nine, astrology to name a few. We find favor with Gann's angles, arcs, levels and percentages. You can learn more via our videos.
From the Gann book called "The WD Gann Master Stock Market Course" (see our education page) we reference chapter 4 "The basis of My Forecasting Method - Geometric Angles" where Gann explains the construction of his trading charts. Gann charts are a 1x1 with time and price. That means that the chart is square. So if a stock high was $28, then the price range (x-axis) would be 0 to 28 and the time range (y-axis) would be 28 days (weeks or months). You can use multiples of 10 to make the chart easier to use for example, change price to $280 and then time axis can have 280 days etc. The point is the chart must be square.
Gann angles appear in many common software packages however they are reapportioned to fit with the computer chart provided (compared to the true paper square chart) and I am afraid they often are unable to present a true Gann chart. All computer charts are presented by an x-axis and y-axis made up of pixels, for example a chart may be 600 pixels wide (x-axis) and 600 pixels high (y-axis). A computerized Gann chart would require that pixels per price (y-axis) are equal to pixels per time (x-axis). Readtheticker.com charts allow you to determine a correct Gann chart construction.
How did Gann Trade with Angles: In short, he would buy and sell stocks subject to the the price action (or tests of support and resistance) around the angles (I refer you to Wyckoffian logic to understand price tests).
Here are some Gann examples using Gann angles and circles. I have highlight price 'tests' and 'breaks' that would have attracted trading attention from Mr W D Gann. Also notice that price reversal patterns are more hazardous than trends.
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Gann Ratios to Degrees (Full Angles:Time x Price):8x1: 7.50, 4x1: 15.00, 2x1: 26.25, 1x1: 45.00, 1x2: 63.75, 1x4: 75.00, 1x8: 82.50
Gann Ratios to Degrees (Half Angles:Time x Price): 12x1: 3.75, 6x1: 5.75, 3x1: 18.75, 1x3: 71.25, 1x6: 84.37, 1x12: 86.25
The !TNX Gann chart above has these measurements (see small red box highlighted)
PeriodsToPrice: 875 x 3.75 (the range from y axis high and low)
WidthToHeight: 875 x 375
To setup up a Gann chart you select the 'manual' scale method within an analysis chart.
The pixel width of 875 divided by the number of periods (days) is: 875/875 = 1
The pixel height 375 divide by the price (3.75 *PriceAdj) is: 375 / (3.75 *100) = 1
Therefore the resulting chart is a true square of time and price, exactly how William Gann himself would have used.
Angle and Arcs Setup: The arcs in the chart that follow are calculated off the high and low allocated to the indicator. Find the high and low from the impulse wave or break out wave, this is your first choice, the raw high and low of this impulse wave. If the raw high and low of the impulse wave renders a poor fit to the arcs to price action then adjust the days difference between the high and low of the impulse wave to a number of days that equal a Fibonacci number. This adjustment can either be down from high or up from low initially selected. This our preferred method of setup, each to their own.
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Gann said 'every significant top and bottom have influence by way of geometry over future tops and bottoms'. They are all related! Find confluence of the percentage levels of a series of highs and lows to find strong support and resistance levels.
Sequence1: 1.56, 3.125, 6.25, 12.50, 25.00, 50.00, 75.00 (continue with sequence4)
Sequence2: 2.08, 4.16, 8.33, 16.66, 33.33, 66.66, 100.00, 133.33, 166.66, 200.00
Sequence3: 2.34, 4.69, 9.37, 18.75, 37.50, 75.00
Sequence4: 100.00, 125.00, 150.00, 175.00, 200.00, 225.00, 250.00, 275.00, 300.00 etc
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Gann would draw for major levels G1,G2,G3 and G4 on every chart. Gann new these levels would provide a strong influence over price action in the future. Knowing these levels ensured, if the price gets there, he would be ready.
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.."Your goals are to select only stocks that move soonest, fastest and farthest in bull or bear markets. Limited losses and let profits run."..
Richard D Wyckoff
Created on: 8/10/2010 11:43:56 PM GMT Last Update: 2/7/2013 12:20:34 AM GMT Posted by: RTT
We at readtheticker.com hold the view that a mix of stock chart technical analysis, Richard Wyckoff, William Gann and Jim Hurst methods plus market fundamentals allows the investor to formulate a very sound market opinion. These attributes are mutually inclusive and must be weighted equally before investing or trading in any Stock, ETF, Currency, Bond, Commodity, CFD or Mutual Fund