Saturday, July 23, 2016

WD Gann Trading Rules

WD Gann Trading Rules
W Gann Trading Rules
WD Gann Trading Rules
Here are the 28 rock solid WD Gann Trading Rules and I have expanded them explaining them in detail and also tried to relate them with today’s markets. W Gann laid very fundamental strong set of rules for trading in any markets. Though these rules were written in 1930s and the markets were much different and those time, however these rules are still valid and applicable and traders who can follow these rules may ensure a successful trading career.
Many legendry traders follow WD Gann Trading Rules and Gann Trading Techniques in today’s markets and have achieved success and so can other traders. Also, please ensure you read the last para as that will be very crucial to follow these rules and set them in your sub conscious mind gradually.

  1. Capital sub division. Divide your trading capital in 10 equal parts and never risk more than one- tenth of your capital on any one trade. Trading Capital means trading capital and William Gann was trying to say that you must still have ensured your financial security before coming to the financial markets by keeping a major fund safe for future needs. So if your net worth is USD 100,000, then you must have secured 90% for your future and used 10% as trading capital and hence only USD 1,000 which is 1% of the total net worth should be used for each trade.
  2. Use Stops. Always protect yourself by limiting your loss and deciding at which price levels your analysis will go wrong.
  3. Never over-trade as this shall not respect the rule number one of capital subdivision in to small trades. The first rule should be seen in respect to the frequency of your trading. In case your frequency is higher than you need to adjust the stop amount as well. And also note that fast decisions are usually wrong decisions. I myself think of a trade many months, weeks and days in advance and only trade it if all the conditions are satisfactory and all the Gann analysis principles are fulfilled
  4. Never let a profit run into loss, after your position is in profit raise your stop, so that you will have no loss on the capital. This rule has an expectation that I follow, I use swing lows or highs for setting my stops, which means loss is allowed in the cases where the stop has not been revised above or below my entry level (as the case may be applicable). View the full article I wrote on Stop Revision Method
  5. Do not trade if you are in doubt, never buy or sell if you are not sure of the trend according to your charts and checklist. W. D. Gann meant here that try to enter in those trades which have confirmed your filtration criteria or the trades that have high probability of going into your favor.
  6. When in doubt get out, and stay away when in doubt, capital safety is primary, enjoy the time in other activities, write a poem, watch cartoon, phone a friend and let the market reach the point of conformity or trade in some other familiar market.
Click here to read all the WD Gann Trading Rules

6 comments:

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douglas gammons said...

Nice! I like these rules. Thanks

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aditi said...

I learned useful rules here. It will definitely help me in improving my trading patter and i can earn better returns by planning a wise trading strategy. For updates timely i follow epic research as well.

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