How Gann determine the trend of the market?
Gann has the habit of keeping an eye on the daily, weekly, and monthly charts, for which he would consult the financial newspapers and pay numerous visits to the stock market, and discussed the financial trade with business consultants all over town. This was the practice, which brought about the evolution of the idea of the whole Gann trading system and Gann angles in his head.
WD Gann after giving much thought and consideration to the matter came to observe a trend, which is the main issue that is addressed, by the Gann trading system and its Gann angles. It stated that trend is somewhat inclined to be going upwards and the price staying stagnant above the given ascending position of the angle, without any signs of breaking off from it, in a decline. Then there was reason found good enough to believe, that the market appears to be healthful and blooming and it was a good time to make profit by endeavoring a full-blown attack. He also observed, that when the trend was appearing to decline and the price was showing to remain below the declining angle, with no sign of appearing to break from its given position above it, he thought that the market was weak and risky to play a bet for a single penny’s worth!
WD Gann’s Gann trading system have the very essence of portraying the market scenario via his Gann angles’ which reflect the market’s potency or weakness with respect to the curves and their relative positions. To exemplify the idea further and make it more clearer for understanding, it can be stated in a simpler way. When the given price in the market is ascending above two times multiplied by one, the market is seemly appearing to be exaggerating its aggressiveness than in the situation when the market is in the position of ascending above one multiplied by times one.
Gann only use the angle for predict the tendency?
WD Gann and his Gann trading system argues furthermore, that, in the course of his Gann angles when the upward moving tendency of the price shows an inclination towards reversal or descent, by breaking forth below the ascent of the corresponding angle, it will always be likely, that that given angle will go in vicinity to its nearest angle downward. If considered vice versa, he predicts, that when the price which appears to be showing a downward trend, comes into the state of reversal from its former instance, by suddenly breaking out and beginning to show a decent through the descending angle, then the tendency of, according to his opinion, is that the price will, in most instances, appear to move towards the closest angle, lying above its relatively corresponding angle.
This is the belief, will be sufficient enough to promote a basic demonstration of what he held as the method, which he employed for making predictions about the stock market and which also forms the core essence of the whole Gann trading system.