Futures and Commodities

Applying the Gann Technique in Trading

By David Rivera

There are three factors that traders have to study carefully when applying the Gann Technique in trading. They have to determine the relationships among the pattern, the price and the time element. Although each of these factors is independent, there are certain characteristics that interlock with each other. The interplay of these elements is crucial in determining the market trends accurately.

Traders have to be able to forecast the best combination of the three factors so that they may be able to win more from their trading activities. Those who depend on only one of the elements may find themselves at the losing end. It is then important to get to the point where everything stands in a balance. When traders study the patterns, they have to take note of the minor, the intermediate as well as the main indicators of the trends. They have to study the changes especially when the trends hit the tops or the bottoms. Traders have to be able to interpret the swing charts correctly so that they can make accurate trading moves.

Studying the price element would consist of the traders looking into the retracement levels. Traders can make use of the price information to predict when they can expect to have tops as well as bottoms. The time factor would also require them to study the cycles or the swing trades over a length of time. The time element can be measured through the swing charts, the cycles as well as the anniversary dates and the square of the price. Most of the time, the swing charts are used in order determine the patterns for the future trends.

Traders have to be aware of the anniversary dates which would refer to the events when the market had major tops and bottoms as well. They have to know when these happened as they can expect it to occur again at a specific time in the future. Traders can predict the future trend based on the cycles that are represented by geometric figures. Traders will be able to make decisions like buying or selling depending on the combinations of the elements. However, they need to strike a balance between and among these factors.

Traders also follow some steps when applying the Gann Technique in trading. They have to create their charts so that they will have a graphical presentation of the data that they need. They then have to create their swing charts so that they may be able to analyze all of the three factors and from there, traders can predict how the market will likely move within a definite period of time.

Fibonacci and Gann techniques can help you learn to trade smarter since you will usefibonacci software. Using these techniques you will be able to limit risk based on potential high and low points in the markets. Limiting your risk is one of the most important things a trader can do. It is maybe more important than profiting. Learn how at http://www.stock-commodity-trading.com.