Catch a Trending Market with Charts & W D Gann

This commodity futures trading methodology originates with the KISS (Keep It Simple Stupid) based school of commodities and stock market trading systems. It’s designed for part-time traders who have no time or inclination to always monitor the markets and closely watch their charts and quotes all day.

Most all commodity and stock market trading systems are trend following in one way or the other. However, the trend length may be long-term or short-term. My intention here is to locate commodities and stock market trading system’s to catch the longer swings, and filter out as many go nowhere whip-saws as possible, plus it can be easily monitored without the use of a computer and with a minimum of time spent studying quotes and charts.

The believed to be greatest trader of all-time Mr. William D. Gann (better known as W. D. Gann) inspired the use of swing charts as a filter for indicating trending market moves. Gann successfully used a combination of various time-frames, the most well known being 3-days, 7-days, and his quarterly swing-charts. Gann taught the now well-known traders adage about that longer time frames are the more reliable and powerful when a buy or sell signal was given.

My own analysis uses a 14-day trend reversal. How do you plot it? Simply mark on chart paper a vertical line when today’s price is higher than it was 14-days ago and keep drawing on up until today’s price is below that 14 days ago when you show the line coming down again. What could be simpler?

How then is a swing chart used? First, it gives a broad indication the market trend could continue in the direction of the current swing. Support and resistance levels are clearly shown and once the swing passes prior swing highs or goes under previous swing-lows, greater weight is given, W. D. Gann said new highs should be bought and new lows sold.

However, as with all long term trend following systems – first pick a market with prolonged trending actions. The foreign currency markets are personal favorite markets to trade – frequently embarking on long term trends with a minimum of whipsaw and sideways market price action.

Using a swing-chart to place my trades, the swing commodity trading system is always in the market. Over 3-years in a bull market and prior to a major bear run, the system has produced 48 trades, with a most impressive 2:1 win loose ratio. This producing a profit of $18,400 per futures contract. However the maximum drawdown was high at 19 cents – more than most traders could stomach.

By adding a simple rule of setting a maximum stop-loss of 2 cents, the maximum drawdown became 8 cents with profitability boosted to 49.5 cents or $30,937.5 per contract. After deducting $100 for  slippage and commission per trade, this easy to monitor trade system shows how a simple technique can produce impressive profits.

Gann’s forecasts of price movements and his ability to multiply money was mind-boggling, not only for traders of that era but by any standard of today. For example, he would predict a stock (or commodity) trading at 145 would go to 164-7/8 but not to 165, and it would do exactly that. 

William Delbert Gann – known world-wide as W. D. Gann, is a trading legend in the world of Stock & Commodity trading. Born June 6, 1878 in Lufkin, Texas. W.D. Gann started in commodity and stock-market trading in the year 1902. By 1908 Gann moved to New York City opening his own brokerage firm, W.D.Gann & Co., located at 18th & Broadway.  After many decades of incredible trading success, W.D. Gann moved to Miami, Florida where he continued his writings and studies up until Mr. Gann’s death on June 14 1955.

W.D. Gann’s trading profits are estimated as high as $50,000,000. Keep in mind he traded in the first half of the century. Mr. Gann, in the presence of representatives of a major financial publication (the Wall Street Journal was later derived from it) Gann made 286 trades in 25-market days, on both the long and short side of the market. Of these 286 trades, and amazing 264 were profitable trades, which is an incredible 92% profitable transactions!

For more information about W. D. Gann and profitable trading, please visit webtrading’s
Gann Trading Course by clicking-on the picture below…

Simple Way To Predict Market Turning Points

A Simple Way To Predict Market Turning Points (and impress your friends) – originally written by Bob Pelletier (President of CSI – CSIdata.com

This brief report is designed to advise those who may have an interest in systems, methods, or services which predict market turning points, such as stock market or forex market far into the future. If you have been solicited by any firm that does this, you may gain some important insight into this area by reading on. Whether you plan to purchase such a service, system or secret is your personal choice. CSI has no preference for one commercially available procedure over another. We simply wish to point out facts that may be helpful.

If I were to tell you to “Pick any date in the future, for any commodity or currency trading and I will show you the next turning point that will occur relative to that date.” You might think I’m crazy, or strongly doubt my claim. The truth is, that anyone can do this within an accuracy of, say, three days about 70% of the time, or within four days 80 to 90 per cent of the time.

The secret depends upon how one defines “turning points”. Suppose we define intermediate market swings or turning points to occur about 25 times per year, or twice per month. Since there are about 250 trading days per year, this allows for one turning point per 10 days. With a dart and a calendar into the future, the dart will hit some seven day time interval (the day hit plus or minus three days) each time it is thrown. If turning points occur, on the average, once every 10 days, then there is a 70% chance my dart will include a turning point within three days.

Additionally, if I knew that last week there was a definite low, my next turning point will be a peak. I’m not interested in 1997; I may not live that long. I can only make money if I can bet on the next immediate turning point for various cycle lengths.

There is not enough room in this Newsletter to show how market turning points can be predicted with more reliability, but it is possible to provide an unbiased estimate of the next peak and the next trough for each given predominate cycle period. Using a method which treats peaks independent of troughs can produce a non-regular period between peaks and troughs (a more realistic behavior) for future market cycles.

Before spending your hard-earned funds on any system, be careful to discover what you can do under purely chance conditions without it.

For more information about commodity futures trading, CSI market data or trading systems. please visit Webtrading.com or click-on the picture below…

Corn is a Great American Food & Traders Market

We are continuing our ongoing work on various developed websites, including the relatively new corn trading system for commodity futures traders web site. Have just added several new dynamic features, including Amazon products and a cool new web toolbar to the bottom of the main page with some interesting features for the use of site visitors.

Any reviews or comments you have about commodity trading and our corn trading system web site would be most appreciated, which feedback we could also add to our site since we are looking for trading system personal feedback to expand the corn trading system site. You can visit it by going to Corn Trading system now, or clicking-on the picture below. Thank you.

101-years ago a Trader Showed His Greatness

The best stocks and commodities trader of all-time was without a doubt Mr. W.D. Gann, who certainly had the most interesting and mystical trading method too. This was reported about Mr Gann by the Ticker Magazine more than 100-years ago in the year 1909. During the summer of 1909 Willima D. Gann predicted the September Wheat contract trading on the Chicago Board of Trade would sell at a price of $1.20. This meant t it must touch $1.20 price before the end of the month of September. At 12:00 Chicago time, on September 30th (the last day) Sept Wheat futures was selling under $1.08, and it looked as though Gann;s prediction would not be fulfilled.

Mr. Gann said, ‘If it does not touch $1.20 by the close of the market it will prove that there is something wrong with my whole method of calculation. I do not care what the price is now, it must go there.’ It’s now history September Wheat surprised the whole country by selling at exactly $1.20 and no higher in the very last hour of trading, with its closing price being exactly $1.20”

So much for what Mr. Gann has said and done as evidenced by himself and others. Now as to what demonstrations have taken place before our representative: During the month of October, 1909, in 25 trading days, W.D. Gann made in the presence of our representative 286 trades in various stocks, on both the long and short side of the market. 264 of these transactions resulted in profits, with just 22 losses.

The capital with which he operated was doubled ten times, so that at the end of the month he had one thousand percent of his original margin. In our presence Mr. Gann sold US Steel common short at 94-7/8, saying it would not go to 95. It did not. On a drive which occurred during the week ending October 29, Mr. Gann bought Steel common at 86-1/4, saying it would not go to 86. The lowest it sold was 86-1/3.

We have seen him give in one day sixteen successive orders in the same stock, eight of which turned out to be at either the top or the bottom eighth of that particular swing. The above we can positively verify. Such performances as these, coupled with the foregoing, are probably unparalleled in the history of the Street.

James R. Koene said, “The man who is right six times out of ten will make a fortune.” He is a trader who, without any attempt to make a showing, for he did not know the results were to be published, established a record of over ninety-two percent profitable trades. Mr. Gann has refused to disclose his method at any price, but to those scientifically inclined he has unquestionably added to the stock of Wall Street knowledge and pointed out infinite trading and investment possibilities.

The complete William D. Gann article and other Gann articles are located here

Time Duration Secrets to Profitable Day Trading

According to our extensive hands-on futures market research, most successful day-trades last about 7-minutes. That assumes the trader is using a reasonable profit objective and exiting the trade as his profit target is hit.

Most losing day trades last approximately 45-minutes on average, when the trader finally exits out of the losing trade. That’s because the trader relies on hope once he sees the trade losing money. The trader hangs-on to the losing trade position relying on hope the market will change trend and turn in his favor. However, eventually the equity loss becomes too large which finally forces the trader to exit the trade and take a big loss rather than possibly lose even more money by hanging on even longer.

Are you wondering how this little known information can help you trade the markets profitably? The short answer is at the end of 7-minutes in the trade you might consider getting out regardless of the fact your profit target was not hit or you have a loss at that time, keeping in mind the more past 7-minutes it goes the less likely the trade will be a winner.

Insights For Search Predicts Real Estate Collapse

In the past we have posted several times about how financial market traders can use relatively simple chart patterns involving higher-swing-lows and lower-swing-highs to successfully trade the stocks & commodities markets, options market and with other investing.

I was doing research on this powerful trading concept this morning and was thinking the incredible real estate market decline could be a good example of how well it can work. Therefore, I went to Google’s “Insights For Search” and searched for “MLS Listing” which is a widely used real estate term by home buyers and sellers.

This is the explanation of how Insights For Search works from Google: “Google Insights for Search analyzes a portion of world-wide Google web-searches from all Google domains to compute how many searches have been done for the terms you’ve entered, relative to the total number of searches done on Google over time. You can choose to see data for select Google properties, including Web search, Images, Product search, and News search.”

The Google Chart displays the most perfect long-term examples I have ever seen visually depicting the great power of swing highs and swing lows. Starting in 2004 the chart shows a series of 8 important swing highs and 6 major swing-lows. Of particular importance is the Dec 06 swing low which broke the old support level established Dec 05 by that major 2005 swing low. Once that old support level was broken in Dec 06 it conformed a major real estate bear market. The market is believed to be the most severely depressed real estate market of all-time, especially in areas of the U.S. such as Arizona, Nevada, California and Florida.

If you were buying/selling real estate the chart clearly shows starting in the year 2005 you should have been selling (not buying) real estate based on the important July 2005 swing-low (which you knew about at the end of August 05, and was confirmed Nov of 2005 which was the month the previous major swing-low was confirmed. The next series of 4 major lower-swing-highs which were in mid-2006, mid-2007, and early-2008 and 2009 confirmed the bear market was ongoing and getting even stronger.

The strong nationwide real estate decline started in late summer of 2005 in several Sunbelt states at the end of Aug 05 (at least according to my knowledge and statistics). However, it got underway a little later in other areas of the nation and the media often reports the bear market started during the year 2006. In my opinion this chart is one of the most picture book perfect and accurate examples of how powerful swing-highs an swing-lows can be. It is something you should always look at and take into strong consideration while trading the markets or investing.

Trading Method for Trading Stocks & Commodities

If there is one single trading technique which can best lead to profitable trading of stocks and commodities it would probably be the concept of using swing highs and swing lows, which is based on relatively simple chart patterns.

The swing high and swing low trading method is based on the observation if you look at a chart of any market you can easily see a down-market consists more of a series of lower swing highs and an up-market is mostly a series of higher swing lows (which swings are also known by the trading term pivot-points).

A swing-high is a high day (or price bar) with lower bars both in front and behind the high bar, thus forming a swing-high. This swing-high must also be under the prior swing-high which results in a lower swing high.

A swing-low is low day (or price bar) with higher bars both in front and behind the low bar), thus forming a swing-low. This swing-low must also be above the previous swing-low, which becomes a higher swing-low.

Buying or selling swing-lows and swing highs are used by many successful traders. This concept has been used by them for a very long time. Simply buying higher lows and selling lower highs by themselves can improve your overall trading results, especially when combined with other sound trading principles, including use of powerful drawdown minimizer logic stop-loss techniques.

Time Duration Trading Secrets & Statistical Validity

Secrets of time durations of profitable & losing day-trades

Most successful daytrades last approximately 7-minutes. That typial trade duration assumes the trader is using a reasonable profit objective and exiting the trade as his profit objectivegets hit.

Most losing day trades last about 45-minutes. That’s because the trader relies on hope once he sees the trade looking like a failure. So he hangs on to the losing trade hoping it will turn, finally the loss becomes too big forcing him to exit the trade after being in the trade for a much longer time than originally anticipated, mostly due to relying on hope.

How many trades are needed for good statistical validity?

Lots of stocks and commodities traders ask how reliable their track-record may be as far as statistical validity goes. They may see some statistics on seasonal trades showing a market was mostly uptrending from April to June during 12 of the last 14 years, for example. The same traders may have experience with their own trading system showing 8 of 9 winners following say a 5-unit moving average crossing over a 9-unit moving average.

None of those scenarios are valid from a statistical validity standpoint. That’s because according to mathematical experts and statisticians a minimum of 30 occurrences are needed for good statistical validity. Please keep this in mind when evaluating a trading system or trader metholodology. Anything less than 30 samples will not be statistically accurate.

Predicting Monday Prices Based on Friday Price

Does Friday’s Stock, Options or Futures Price Action Predict Monday’s Price Movement?

Is it possible a market trading methodology or trading system can be profitable based on a simple trading method involving Friday’s prices to successfuly predict the opening price on the following Monday?

This trading pattern does not appear every single week but it’s often reflected in the financial markets. And when it does appear, the following Monday’s prices tend to perform in a predictable manner, possibly leading to trading profits got you.

The trade setup uses the opening and closing prices on Friday to trend in the same direction. Interim price movements and trend directions are not relevant for this trading method.

Stocks and commodity price openings don’t need to go too far past the first several ticks, as a price-gap which quickly reverses is sufficient for the purposes of this trade method, but that’s the direction the closing price needs to trend.

Monday’s opening price is likely to first start trending in the same direction at the opening of tradding vs the pattern of the two prices Friday moving in the same direction as each other, then Monday’s open is likely to start trending in the same direction imediately after the opening occurs.

Do your own technical narket analysis of old market price action based in one-minute bar-charts or real-time tick-charts to view the price action and weekly market trading patterns. You will see it sometimes does not work all weeks but does appear to be better than 50% reliable.

This simple but interesting trading method may work particularly well involving commodity futures trading in addition to stock market and foreign exchange market trading of the Forex Futures markets. Iy has not been tested in the futures optiosn maret but there is a good chance it will work there too.

Simple but Excellent Commodity Trading Method

It involves buying so called higher swing-lows and selling so-named lower swing-highs. Also known as pivot-points. A definition of these swing-highs and swing-lows is appropriate here: A swing-high is a high bar with lower bars on both sides the bar. Whereas, a swing-low is a low bar with higher bars on both sides.

The more lower bars to the left of a swing-high the better. The more higher bars to the left of the swing-low the better. That makes them more significant and presumably more powerful swing points. However, only one bar on either side is still acceptable (but two or more to the left are usually stronger trade signals).

My trading methodology requires two (or more) consecutive swings, with the second one being a higher swing-low vs the preceding one for a buy. Alternately, the second swing-high needs to be to be a lower swing-high than the preceding swing for a sell signal.

The actual going long trade entry takes place on a buy-stop 2 ticks above the high price of the last bar (the bar following the swing-low pivot bar), for a buy. The short trade signal takes place on a sell-stop at 2-ticks under the lowest price of the last bar (the bar following the swing-high pivot bar), with a sell.

Your stop-loss order is placed 6-ticks under the lowest price of the last swing-low bar on a long trade. The short trade stop goes 6-ticks above the highest price of the last swing-high bar.

It’s possible for you to make excellent commodity futures profits from using this simple, but very effective trading methodology. Authored and Copyrights by David Green. All Rights Reserved.

Amazing Method for Reducing Trading Risk of Loss

This Special Report reveals an amazing method we can teach you to reduce risk of loss when trading the financial markets by staying in good trades, but trading with small stop-loss orders to avoid large trade losses.

Always using a stop-loss order is normally critical to commodity futures trading success. The most famous stocks and commodities trader of all time, Mr. William D. Gann, said repeatedly in his books and commodity course that it’s always critically important to place a stop-loss order on each trade you make. That way bad signals and losing trades will not likely wipe out your trading capital, thanks to your stop-loss order giving you some protection.

Most trading systems and trading methods require fairly large stop-loss orders. That is because stops are frequently based on one or more of the following logical (but frequently ineffective) trading methodologies:

Place a stop-loss order at a pre-determined percentage of the true daily trading range. For example, if the true daily range or average of recent true ranges (High minus Low, plus any gap between prior close and today’s low or high) is say 83 points, then the stop may be set at perhaps 120% of that range or about 100 points. In the Deutsche Mark that equals $1,250.00 stop, plus any price slippage..

Another method is by placing a stop-loss just under the last swing-low or pivot-low. Note: A swing-low is a low point with higher prices on each side. For example, if last swing-low was at 7650 and price moves up for a few days to say 7750, then triggers a buy signal, stop may be placed just under the low price of the low day, perhaps at 7649. Unfortunately, that example means a potential risk of over 100 points ($1,250.00+). Of course, the reverse is also applicable on a sell position, with the stop being just above swing-high.

Using a moving average penetration as a stop, i.e., place a stop on a long trade at just under a simple moving average, possibly based on a 9-day average. The trouble here is that if we entered long at about 77.50, by the time the moving average is penetrated by the price, the moving average may be well below the market (due to its inherent lag-time), at 7600 or so. That results in a stop-loss at 7599 stop, and a risk of about $1,900.00.

One more stop-loss trading approach is to place a stop order under last week’s lowest price. This method may be even riskier because last week’s low may be 7550. That requires a stop of 7549 or lower, and a risk in excess of 200 points or over $2,500.00.

Another simple and a completely unscientific trading approach is known as a "money stop." It involves setting an usually arbitrary stop based on either the maximum money you wish to lose, or stop based on a reasonable sounding number of points or dollars.

As an example, psychologically you may not want to lose more than $1,000 so you set your stop at a price equaling $1,000 loss potential. That number is arbitrary, so it may turn out to be either too small or too large, depending on the volatility and the market involved. For example, perhaps it’s too small a stop for T-Bonds when they’re volatile or too large when they are dull. If using the $1,000 stop-loss in the Corn market or another low-risk low volatility market, it may be too large a stop to use.

By now you may be asking if there’s a better way to set market stop orders more scientifically and with better reliability and accurately, thus enabling me to keep risk low and still avoid getting "stopped-out" needlessly and stay in the potential winning trade?

The good news is a big YES, there is a way to do much better. By using Webtrading’s "Drawdown Minimizer Logic." Drawdown Minimizer Logic is an amazing and proven way to set stop-loss levels very tightly to guard against large losses, yet keep the stop scientifically and strategically placed just far enough away to prevent premature hitting of the stop-loss; thus keeping you in most trades instead of being stopped-out at a loss. Don’t worry if this methodology seems too technical, because it’s basically simpler than it appears.

You may be wondering if our confidential “drawdown Minimizer logic” stop-loss methodology will be disclosed? Yes, we are willing to reveal this secret ingredient to commodity futures trading success to traders who sign-up to our news feed. That is how you can soon learn about our incredibly valuable information which can lead to making-money trading the financial markets…

In the upper right area of this web-page you will see a signup area which says “Sign up to receive breaking news as well as receive other site updates!” Simply add your email address and click go. We plan to reveal the details about how you can access the information in the near future, so please be patient as you wait. And by the way, I promise your email address will be kept confidential, never shared with anyone, or published anywhere and you will not receive too many emails.

Announcing 2 More New Websites Now Developed

We are announcing a few more websites which are now online. One of the new sites is a domain name we just obtained and revolves around daytrading of stocks, commodities and futures with the keywords in the URL working nicely since financial market traders are obviously always looking for the Best Daytrading Software The web site has its own free custom newsletter subscription link and a cool RSS Feed capacity plus some customized content. Go here: Best Daytrading Software…

Another site we are announcing is Commodity Daytrading This is actually a very old domain name we have owned since Dec 12 1999 which is almost like a light year as far as the fast moving Internet goes. For almost 10-years the domain name was used mostly as a forwarding domain which redirected to one of our other trading sites.

Recently we realized the great power of the two financial keywords (Commodity and Daytrading) so we developed the web site ouselves and will be adding more and more features and content to it as time goes by. Please pay a visit here to Commodity Daytrading where you can also get a free online corn market trading method which you possibly can use to make money with by trading the method.

The new site already ranks #3 in Google for the words “Commodity Day Trading” and ranks #1 for “CommodityDaytrading” with an extremely strong #6 ranking based on a staggering high 13-million results for Commodity Daytrading used without the tight requirements of using quotes. Here are the Google results

Technical Analysis Chart Pattern Trading Tips

Technical Tips from Dan Gramza. Hello everyone, this is Dan Gramza and welcome to Gramza Market Studies Technical Tip.

Well today we’re going to be talking about selling market rallies. Now what does it mean when people say “sell the rally” when you want to get into a commodity, stocks or options trade? Or they sell a pull-back? Or you hear things like, “The Trend Is Your Friend?”

We’re going to explore this here in just a minute. I want to show you the trading technique and I want to show you some examples of how these trading markets behave in those settings.

 I want to show you an example, but before I can talk to you too much about this example I need to define a few things for you.

First candlesticks technical analysis… the approach I use with Japanese candle charts, and that is what you’re looking at here, is not the standard approach. So from my perspective, I don’t focus on patterns, I focus on chart behavior. If we see a green candle that represents buying it means the closing price is higher vs the opening price.

If you see a red box which represents selling it means the closing price is below the opening price. If you see a white line on top that’s called a shadow, I think it represents selling. If you see a white line on the bottom that pattern represents buying. Now with that in mind, the sizes of the bodies and the shadows tell us about the degree of market buying or selling.

Now let’s talk about this trade set-up here… To get the rest of these trading-tips, please visit the link below and WATCH me here: http://www.ino.com/info/36/CD159/&dp=0&l=0&campaignid=9

A Money-Making Potential Futures Trading Method

This important commodity futures trading technique should help you greatly to trade the futures markets profitably (assuming it is applied correctly). This market structure trend direction prediction method is esentially a pattern recognition method which is basically simple but at the same time it’s powerful, with great potential for trading profits.

It’s the best way we have found to identify commodity market direction and define a bullishly or bearishly structured market. It is based on the observation that if you look at a bar chart of any market, you will see a bear market consists of mostly a series of lower highs and a bull market consists of mostly a series of higher lows.

These higher-lows and lower-highs are referred to by Commodity Traders Club as Swing-Lows and Swing-Highs, also known as Pivots, or Pivot-Points.

A swing-low is defined as a low day (or bar) with higher prices both in front and behind the low day (or bar), thus forming a swing-low. This swing-low must also be above the previous swing-low, thus forming a higher swing-low.

A swing-high is defined as a high day (or bar) with lower prices both in front and behind the high day (or bar) forming a swing-high. This swing-high must also be under the prior swing-high thus forming a lower swing-high.

The concept of buying higher swing-lows or selling lower swing highs is used by the most successful large futures traders. This concept has been used by them for a very long time. These traders don’t talk much about this simple but potentially profitable technique. Very few traders are familiar with this powerful, yet relatively simple trading technique.

Merely buying higher lows and selling lower highs by themselves can dramatically improve your trading results. You also need to know where to place a target so you can get out of the market once your profit objective is reached. You need to know where to place a protective stop-loss if the trade is wrong. For this we strongly recommend you use "Drawdown Minimizer Logic®" which is explained in detail in a prior CTCN Special Report. Drawdown Minimizer Logic is a mathematical method of sharply reducing drawdown based on past "adverse excursions."

A sample chart showing how to use swing-highs and swing-lows (a.k.a. market structure) to trade successfully is available on request.

The concept of only selling short providing a LOWER "Swing-High" has occurred, and only buying upon the occurrence of a HIGHER "Swing-Low" can be very profitable.

This method appears highly profitable when used on old charts, using a bit of subjectivity on the past data. Old charts and hindsight combine to make it look highly profitable. However, doing it in real-time trading is more difficult.

Selling, providing there are 2 or 3 lower days (or bars), instead of just one on each side of a high point qualifies as a more significant Swing-High, and can be very profitable. Of course, the reverse is true for a Swing-Low buy. The more days (or
bars) on each side of the swing day (or bar) is better to better define the Swing-High and Swing-Low.

The problem is the fact the more days (or bars) on each side there are, it’s likely more of the move is over by the time we can get into the market. Conversely, the fewer days (or bar-chart bars) of each side of the pivot bar means the move has likely not progressed far. However, it’s more likely to be a false or minor Swing-High/Low and consequently less profitable,
or an overall loser.

It’s fairly easy to identify and draw buy and sell arrows or dots at Swing-High and Swing-Low points on charts. However, doing it in real-time trading is not as easy as it appears on a back-data bar chart.

Nevertheless, the Swing-High and Swing-Low concepts (a.k.a. Market Structure) are in our opinion the best trend identification tool for trading the commodity futures markets successfully. It will "work" in any market, the actual market makes little difference. Of course, as always, trending markets make it work a lot better.

The concept of buying/selling Swing-Lows/Swing-Highs is simple and can be amazingly successful but needs to be combined with a good stop-loss method to give you protection on false signals. It’s recommended you use CTCN’s copyright "Drawdown Minimizer Logic®" to scientifically set stop-loss levels. "D.M.L." is used by CTCN’s Swing Catcher® technical analysis software system.

Amazing trading 100-yrs ago by William D Gann

It has been asked in phone calls and emails if there is a method to predict futures markets turning points based strictly on
numbers and charts. The only way we know how to do this is to Square Price & Time and to draw Geometric Gann Angles using “Square Charts”, as outlined in our W D Gann Trading Course.

We also have some great reprints of old articles about W. D. Gann, the most famous stocks & commodities trader of all time. Here is part of a fascinating article about Gann written in 1909 by a newspaper which later became known as The Wall Street Journal.
“It is very difficult for me to remember all the predictions and operations of Mr. Gann which may be classed as phenomenal, but the
following are a few. “In 1908 when the Union Pacific was 168-1/8, he told me it would not touch 169 before it had a good break. We sold it short all the way down to 152-5/8, covering on the weak spots and putting it out again on the rallies, securing 23-points profit out of an 18-point wave.”

“He came to me when United States Steel was selling around 50, and said, “This Steel will run up to 58 but it will not sell at 59. From there it should break 16 points.” We sold it short around 58 with a stop at 59. The highest it went was 58. From there it declined to 41-17 points.”

“At another time, wheat was selling at about .89¢. He predicted the May option would sell at $1.35. We bought it and made large profits on the way up. It actually touched $1.35.” “When Union Pacific was 172, he said it would go to 184-7/8 but not an
eighth higher until it had a good break. It went to 184-7/8 and came back from there eight or nine times. We sold it short repeatedly, with a stop-loss at 185, and were never caught. It eventually came back to 17.”

“Mr. Gann’s calculations are based on Natural Law. I have followed his work closely for years. I know that he has a firm grasp of the basic principles which govern stock market movements, and I do not believe any other man can duplicate the idea or his method at the present time.”

Early this year, he figured that the top of the advance would fall on a certain day in August and calculated the prices at which the Dow Jones Averages would then stand. The market culminated on the exact day and within four-tenths of one percent of the figures predicted.” “You and Mr. Gann must have cleaned up considerable money on all these operations,” was suggested. “Yes, we have made a great deal of money. He has taken half a million dollars out of the market in the past few years. I once saw him take $130, and in less than one month run it up to over $12,000. He can compound money faster than any man I have ever met.” (Editor’s Note: these figures are based on 1909 Numbers)

“One of the most astonishing calculations made by Mr. Gann was during last summer [1909] when he predicted that September Wheat would sell at $1.20. This meant that it must touch that figure before the end of the month of September. At twelve o’clock, Chicago time, on September 30th (the last day) the option was selling below $1.08, and it looked as though his
prediction would not be fulfilled.

Mr. Gann said, ‘If it does not touch $1.20 by the close of the market it will prove that there is something wrong with my whole method of calculation. I do not care what the price is now, it must go there.’ It’s common history that September Wheat surprised the whole country by selling at $1.20 and no higher in the very last hour of trading, closing at that figure.”

So much for what Mr. Gann has said and done as evidenced by himself and others. Now as to what demonstrations have taken place before our representative: During the month of October, 1909, in twenty-five market days, Mr. Gann made, in the presence of our representative, made 286 transactions in various stocks, on both the long and short side of the market. 264 of these transactions resulted in profits – twenty-two in losses.

The capital with which he operated was doubled ten times, so that at the end of the month he had one thousand percent of his original margin. In our presence Mr. Gann sold US Steel common short at 94-7/8, saying it would not go to 95. It did not. On a drive which occurred during the week ending October 29, Mr. Gann bought Steel common at 86-1/4, saying it would not go to 86. The lowest it sold was 86-1/3.

We have seen him give in one day sixteen successive orders in the same stock, eight of which turned out to be at either the top or the bottom eighth of that particular swing. The above we can positively verify. Such performances as these, coupled with the foregoing, are probably unparalleled in the history of the Street.

James R. Koene said, “The man who is right six times out of ten will make a fortune.” He is a trader who, without any attempt to make a showing, for he did not know the results were to be published, established a record of over ninety-two percent profitable trades. Mr. Gann has refused to disclose his method at any price, but to those scientifically inclined he has unquestionably added to the stock of Wall Street knowledge and pointed out infinite trading and investment possibilities.

The complete William D. Gann article and others are located here

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