The Trading Methodologies of W.D. Gann A Guide to Building Your Technical Analysis Toolbox

by Reddy, Hima

• ISBN13: 9780132734387
• ISBN10: 0132734389
• Edition: 1st
• Format: Hardcover
• Copyright: 2012-09-30
• Publisher: Ft Pr

Summary

W.D. Gann's works helped to pioneer the discipline of technical analysis, and they still offer immense potential value to investors and traders. However, Gann's original publications are esoteric and can be challenging to read and use. In this book, long-time trader and expert technical analyst Hima Tadoori brings these works to life for modern traders and investors. She distills Gann's tenets into crystal-clear, bite-size explanations, and illuminates them with exceptionally intuitive charts and illustrations. Drawing on extensive personal experience, Tadoori explains how Gann's insights into price, pattern and time can be applied in all types of markets and market conditions. Using this book, any experienced trader can discover the value of Gann's approach, and start utilizing it in his or her own trades. Then, with Tadoori's discussion as a foundation, traders and investors can delve even more deeply into all of Gann's works, identifying even greater opportunities for profit.

Author Biography

Hima Reddy, CMT, was first introduced to technical analysis, and to the works of W.D. Gann, during her high school years by her father, who has had a passion for trading and the markets since the early 1980s. However, it wasn’t until after she completed an undergraduate Finance degree at Indiana University’s Kelley School of Business, and returned to her home state of New York in 2001, that she immersed herself in the markets. She simultaneously volunteered as a sponsorship coordinator for several Market Technicians Association conferences, traded equity and commodity futures under the tutelage and guidance of her father, and completed the Chartered Market Technician certification. In 2006, she joined Informa Global Markets, an independent financial research firm providing live, 24-hour market analysis. As Senior Technical Analyst, she was responsible for producing timely and accurate short-term technical analysis and trading strategies for fixed income and FX markets. With analysis ranging through multiple timeframes, her team also prepared written updates covering longer-term trends. Hima’s “guru” has always been Gann—the first market analysis book she ever studied in-depth was How to Make Profits in Commodities—and to this day that is her go-to guide to the markets. Since 2011 she has returned to trading independently and continues to write about the financial markets. Her primary methods of technical analysis include pattern recognition and time duration relationships within markets based on Gann’s methodology, momentum assessment through the use of the Relative Strength Index (RSI), Fibonacci relationships, and moving average systems including the use of channels for trade management. Hima now resides with her husband in Baltimore, Maryland.

Table of Contents

Foreword     xv

Preface     xvii

Chapter 1  The Work of W.D. Gann     1
  Market Predictions     1
  Publications     3
  Focus of This Book     5
  Trading Rules     6

Chapter 2  Elements of the Market     9
  Basic Market Movement     9
  Price Is King     10
  Patterns Repeat     11
  The Construct of Time     20

Chapter 3  Interpreting the Market     27
  Gann’s View of Price Movement     27
  Projections Based on Existing Price Movement     32

Chapter 4  Trading the Market     39
  Exceeding Moves in Time     41
  Triple Bottoms/Tops     49
  Double Bottoms/Tops     57
  Exceeding Moves in Price     63
  Buy Old Tops/Sell Old Bottoms     69
  Rapid Moves     74
  Trading Ranges     80

Chapter 5  Application of Gann’s Principles     85
  Gann’s Favorite Numbers     85
  Gann’s Principles Applied Outside of Price     95
  The Importance of the Closing Price     108

Chapter 6  Trade and Capital Management     119
  Risk Assessment     120
  Placement of Orders     123
  Trade Initiation     126
  Management of Trade     127
  Trade Exit     135
  Review     136

Chapter 7  Bringing It All Together     139
  Exploring Gann’s Examples     139
  Rigid Rules, Flexible Observation     150

Chapter 8  Beyond Trading Basics      155
  Looking to the Left of the Chart     155
  Recommended Reading     160
  Obtaining Charts     161
  Gann’s Writing Style and References     162
  A Study “Partner”—an Invaluable Tool     167
  The End...of the Beginning     170

Appendix A  Gann’s 28 Trading Rules      173
Appendix B  Affirmative Versions of Gann’s 28 Rules     177
Appendix C  Gann’s Buying and Selling Points     181
Appendix D  Gann’s Soybean Chart     185
Appendix E  Google, Inc. (GOOG) Highs and Lows by Calendar Month     187

Index      189