Follow the Main Trend
W.D. Gann: Rules for Trading
FOLLOW THE MAIN TREND
By W. D. Gann
This past Intraday DJIA chart shows how the Gann concept of selling new lows is necessary to catch larger moves. Excalibur Method was used to pick entries.
WD Gann writes: “You will always make money by following the main trend of commodities up or down. Remember that commodities are never too high to buy as long as the trend is up and they are never too low to sell as long as the trend is down.
Never sell short just because the commodity is high or because you think it is too high. Never sell out and take profits just because the price is high.
Buy and sell according to definite rules and not on hope, fear or guesswork.
Never buy a commodity just because the commodity is low. There is usually a good reason why it is low and it can go lower.” – WD GANN
George’s Commentary: This is a core concept for successful trading. WD Gann mentioned this strategy in several places in his writings. This technique is pinpointed as a counter-strategy to the mass psychology of most people.
The average person wants to sell for the highest prices and, at the same time wishes to buy for the lowest prices. This type of thinking sets up an internal conflict which works against them when they wish to follow new higher or lower trends in the markets.
This is also how major trends are frequently missed as the fear of “buying too high” keeps most out of major price moves and the most profitable areas of a trade. -GR Harrison