Monday, August 25, 2014

How to Trade Gann Theory

 Making stock or Forex trades using Gann theory. This is a popular style of analysis that looks at patterns and repeatable price action based on time and is something traders need to learn. Many traders have decided it best to examine Gann Theory a bit further and learn how to trade with it. It takes time to learn but traders who learn how to use it make more winning trades.
There are three trends applicable to any timeframe which you are analyzing: Minor, Intermediate and Major. That also means that there are three types of swing highs and lows that correspond with these trends. Using the Gann swing highs and swing lows we can labeled Gann Swings are actually intermediate swings. In Gann trend analysis, a downtrend occurs when price breaks a swing bottom. If price moves downward in a defined uptrend but does not break a swing bottom, it is called a correction and the trader has no need to exit their long. A break of a swing bottom would constitute an exit signal.