Charts to Keep Up

W.D. Gann: Rules for Trading

THE KIND OF CHARTS TO KEEP UP

By W. D. Gann

WD Gann writes:

“Remember the old Chinese proverb “One good picture is worth 10,000 words”.

“You should make up charts and study the picture of a commodity before you make a trade.

You should have a weekly high and low chart, a monthly high and low chart and a yearly high and low chart.

• A yearly high and low chart should run back 5, 10 or 20 years if you can get records that far.

• Monthly high and low chart should go back for at least 10 years and the weekly high and low chart should go back for 2 or 3 years.

• When commodities are very active you should have a daily high and low chart. This need not go back more than a few months. Start the daily chart after the commodity breaks into great activity.” – WD GANN

George’s Commentary:

Mr. Gann gives us the starting points for our chart analyses.

We should note that these same chart rules apply to Stocks and Forex as well as to Commodities.

Yearly, Monthly, Weekly and lastly Daily charts (once a movement has begun) are the charts that need to be consulted. Today, very few use even daily charts. In fact, the majority are focused on intraday price movements of minutes or hours. But, the greater trends, (the ones that have the most long-term profit promise) run on much longer time periods and one must have past records of these longer trends in order to define just where we are at present within the cycle of extreme highs and lows. -GR Harrison

Next Rule: Follow the Main Trend