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It's simple to see that for as long as there are variables involved
in any of the many, many different indicators available to us traders,
each one of these indicators are open for interpretation by each individual
trader looking at them. That makes for a lot of variable moving averages
doesn't it? That pretty much well goes for all the various trading
strategies that are out there in the traders market place today as
well.
It's
no surprise that most suppliers of these indicators and strategies
have a nice big warning at the bottom of their advertisements that
read something like, "Trading in Futures , Stocks or Commodities
Can Result in Severe Losses!" In other words it probably
hasn't worked for them so you're on your own once you've bought it!
And quite rightly so, as we all must take the responsibility for ourselves
in everything we say and do.
Thank
goodness that when it comes to Gann Swings there are no variable parameters
to delude the trader from the truth of the trend, there are no parameters
to be optimized or form fitted. Although there are parameters, they
are but absolute ones. Absolute parameters that don't vary depending
on who you're talking to! These two absolute parameters are constantly
working simultaneously; they can only work simultaneously. They are
Time & Price. There is not much more to
know about the structure of a Gann Swing than these two friendly partners.
When
I opened W.D Gann's book, How to Make Profits in Commodities,
one of the first passages I read was, "I am going to give you
the best of my forty years of experience in this book, and I hope
to show others the way to help themselves and follow mathematical
rules in the commodity market, which will result
in profits". W.D Gann. I thought, now here is someone
worth listening to. If Gann could give me just one indicator, one
strategy that progresses beyond the individual, subjective interpretation
then that is what I'm looking for.
Gann
offers this knowledge to each of you with a sincere conviction that
if you put in the time to study, you will derive great benefits.
To me that is a sure indication to a successful strategy.
A trader
doesn't expect to make money from a trading indicator. So, what does
a trader expect to get from an indicator? Perhaps the trader is after
an idea of the direction that price has been moving in, or perhaps
the direction that price is moving in. But more than likely the trader
is looking at any of the many indicators to determine the direction
that price will be moving in, in the future, so as to profit from
price movement.
So,
what a trader really wants out of an indicator is a strategy. Given
that an indicator may lead the trader to a possible strategy it's
really quite hard to separate the two from each other. What does separate
them though is the trader's ability to act on the information
given to the trader by the indicator. To trade, using the signals
that are presented to the trader via the indicator, for profits, is
the strategy that we, as traders, might really be looking for.
You've
all heard, "trade with the trend", and, "the trend is
your friend", such good advise as well. So, identifying the trend
is really the key to the game isn't it? Simple. So now let's identify
the trend. How do we do that? What kind of tool is going to tell us
the trend? As far as Gann's forty years of experience could tell him
...
...
Price Tells the Trend.
Australia's
SPI - End of Day - 7/7/99.
It's
not hard to see here that over a given range of time, price has a
tendency to move both up and down. If we can learn about price's consistency
in it's characteristics then we may have solved the puzzle to our
search for the right indicator to determine the right strategy. Are
Gann Swings both the Indicator & Strategy? Let's take
a further look into the law of trends defined by the Gann Swings.
Happy
trading,
Solomon
Thallon
HotTrader, Australia
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