15 Gann Techniques for Superior Stock Market Returns 🚀

15 Gann Techniques for Superior Stock Market Returns 🚀

Strategy

April 2024

📈 Gann was one of the greatest traders who ever lived. He developed numerous techniques based on patterns in price and time. Let's examine 15 powerful Gann-inspired techniques every trader should know.

📈 Friday Signals
📈 Friday Signals

If a stock hits its weekly high or low on a Friday, expect the trend to likely continue the following week. For example, if ABC stock reaches a new weekly peak on Friday, look for higher prices the next week. ⬆️

🗓 Tuesday Lows

In strongly trending markets, weekly lows tend to form on Tuesdays. Pay close attention to lows made on this day as it implies the preceding trend is intact. 📉

💯 3 Day Breakouts
💯 3 Day Breakouts

A buy or sell signal occurs when a stock crosses above or below the high/low of the prior 3 days by 3% or more on the 4th day. For example, a move in ABC stock from $30 to $31.03 would qualify but not $31. 📈

📉 50% Retracement Buy Zones

After a strong run, half of the gain is a potential support level to accumulate on. For example, if ABC stock rises from $10 to $15, look to buy around the $12.50 zone on a pullback.

⏩ Trend Reversal Signals
⏩ Trend Reversal Signals

If a correction is longer in both price and time than prior ones, it implies a potential trend change. For example, a 4 week vs 2 week decline. ↔️

✅ Previous High/Low Barrier

Once a past peak or trough is clearly surpassed, it should not be broken in the opposite direction or it signals further trend adjustment. ↔️

🕙 Trending Timeframes
🕙 Trending Timeframes

Corrective phases typically last 1/3 the duration of the preceding trending phase. For example, after a 9 day rise, anticipate a 5 day pullback. 📉

Conclusion

Gann developed numerous insightful trading strategies based on patterns in price and time. By understanding and applying techniques like Friday signals, trending timeframes, and previous high/low barriers, traders can gain an edge in identifying high probability trade setups. Mastering Gann analysis can help one achieve consistently superior returns over the long run.

📮FAQ

Some Frequently Asked Questions.

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Friday signals can be important because if a stock hits its weekly high or low on Friday, it suggests the trend is strong and likely to continue in that direction the following week. Monitoring Friday performance can help identify trends that are likely to persist.

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If weekly lows are being established on Tuesdays, especially in strongly trending markets, it implies the underlying trend is intact and holding. Paying attention to lows formed on Tuesdays could help confirm an ongoing downward trend.

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For a 3 day breakout signal to occur, the stock must cross above or below the high/low of the previous 3 days by 3% or more on the 4th day. This indicates a decisive surge in momentum that could signify a resumption of the prior trend.

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After a strong move higher, half of the gain (the 50% retracement level) often represents a previous support area. If price pulls back to this level, it can be an optimal low-risk entry point, with tight stops below, to capitalize on the continuation of the prior trend.

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Gann noted that corrective phases typically last around 1/3 the duration of the preceding trend phase. By observing prior trend and consolidation periods, traders can get a sense of how long pullbacks might last moving forward based on the rule of trends lasting 3 times as long as corrections.

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