Anyone can enter stock trading so long they are well acquainted with the right knowledge on every aspect of it. When it comes to intraday trading, in particular, knowledge and experience are the equipment you require to earn the big money you have been dreaming of. The best way to see good results in stock trading is by learning the Gann Theory or Gann Trading Strategy, named after William Delbert Gann, a popular American trader, and market theorist.
What is Gann Theory?
Gann Theory helps predict the movement of stocks based on the market – past, present, and future. The assessment of short-term as well as long-term rises helps us understand future trends in the market. According to Gann, mathematical relationships, in tandem with geometrical angles, help foresee future changes in the prices. These angles are basically represented by a diagonal line that moves at a uniform rate of speed.
What are the geometrical angles Gann refers to?
In Gann Theory, a series of angles are drawn, each angle representing particular price points. These angles depict the past, present, and future attributes of the stock prices. These angles help in envisioning future price movements. The different price points are connected on the chart before determining the Gann angles.
Fundamentals of Gann Theory
Gann Theory has been applied by traders for a few decades. A tradesman gets an understanding of the market’s position and its correlation with the past value. Using this information, he attempts to predict future price action. Although computerized techniques that are used to place them on computer screens are available, many analysts still draw them manually.
Applications of Gann Theory
To understand the approach of calculations in Gann Theory, one has to explore and study the behavior and study of time, price, and pattern. Some formal training classes can help read and understand the Gann Theory.
Time Study Model
A study on time will help you determine the reversal of stock price. When you do a time study, you can understand the statistics and historical data that help envisage the future of the stock markets.
Price Study
The Gann angles help determine the price patterns in the stock market.
Pattern Study
The activities of investors and movements of stocks are always monitored and controlled with pattern check. Pattern study refers to studying the trends and patterns that depict the reversal in the stocks.