WD Gann Trading Rules Part-II

In Continuation with Previous Article

  1. Avoid taking small profit and big losses. Even with accuracy of 80% a trader might remain in a loss if he is taking big small profit and small losses. Options sellers operate at accuracy of above 99%, where the profits are small, while the 1% cases of loss could be big that they wipe out all the profits. Mark Douglas talked about a trader who had only 5% of winning trades, but his profitable trades were phenomenally profitable, while he was very quick to get out of a losing trade. His 5% profitable trades were able to pay off for all the 95% losing trades and also bought him into net Profit in the end of each financial year.
  2. Never cancel a stop order after you have fixed it after entering the trade as you fixed that stop because of some purpose. Stop gets hit come and again read this list of WD Gann Trading Rules.
  3. Avoid getting in and out of market too often, very similar to over trading rule.
  4. Be just as willing to sell as willing to buy, let your objective be to make money with the trend
  5. Never buy a stock/commodity/currency just because the price of the stock in too low or don’t sell just coz its too high.
  6. Be careful about Pyramiding at the wrong time. Wait until the stock/ commodity/ currency is very active and has crossed the resistance levels before buying more and until it has broken out of the zone of distribution before selling more.
  7. Select the commodities that show strong uptrend to pyramid on the buying side and the ones that show definite downtrend to sell short
  8. Never hedge. If you are long of one commodity and it starts to go down, do not sell another commodity short to hedge it. Get out of the market take your loss and wait for another opportunity.
  9. Never change your position in the market without a good reason. When you make a trade, let it be for some good reason or according to some definite rule, then do not get out without a definite indication of change in trend.
  10. Avoid increasing your trading activity or position size in case of long period of success or a period of profitable terms. May be there is a conjunction point and soon the reverse will start happening. So safeguard yourself. Also the correction which could be in price (if you lose it’s a price correction) and if you pass the time by going holidays or using the time for research or studying the markets this is time correction of your profits of says sideways movement after which you will be ready for another up move in profits.
  11. Don’t guess when the market will top. Let the market prove it is at top. Similarly don’t don’t guess when the market is in bottom. Let the market prove that. By following the definite rules you can do this.
  12. Don’t follow another man’s advice (trader/ analyst/ news channel/friend/elders) unless you know he knows more than you.
  13. Reduce trading after first loss, never increase the position size in this case
  14. Avoid getting in wrong and getting out wrong; getting in right and out wrong, this is making double mistakes.

When you decide to make a trade ensure that you do not violate any of these trading rules. These rules are vital and important to your trading success. Whenever you close any trade with loss go over to these and see which rule you have violated. Do not make the same mistake again the second time. Experience and investigation will convince you of the value of these rules. And observation and study will lead you to correct and practical theory and successful trading in stocks/commodities/currencies.

10 thoughts on “WD Gann Trading Rules Part-II”

  1. Nothing like that.. WD Gann was awesome as rule returns 80 years back are valid till now and will be valid for coming 100 years..

  2. Never ever deviate from your trading rules and trading strategy…Better put today`s trading game plan in front of your eyes in bold letters with clearly mentioned entry/exit targets….Dnt look beyond that for that day…no need to get immersed in the noise of the mkt…Book profit at the designated targets and put the proper the sl at the time of entry only…For SL, u need nt wait for the SL getting hit ..even a reverse candle givesyou enough hint to jump out early… and finally dnt feel too much elated on your sucess nor get into despondency mood, if you loose….Its a business for us and take it like that…never try to make it like gambling or lottery…you will surely laugh all the way to the bank….It takes around 5 years to start counting your money in trading…so have patience….apka number bhi aayaga

  3. As a trader it is very very difficult to follow each rule listed out here thats why success ratio is quite less in this business….. Seems long journey to become professional trader which may take 3-5 yrs or more….

  4. majority people make homework but suddenly change game plan when mkt opens . these rules wil help him to avoid this mistake.

Leave a Reply