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Drawing correct W D Gann Angles + Technical Trading         article #3

by Robert Johnson www.aawealth.com

If you do not make your own hand drawn trading charts, or do not have charts available, you can go to www.stockcharts.com  and print out charts to work with. These techniques can be used on any time frame.

Now  you need to have the angles properly drawn as described in article #1.  I will describe how to use them for support and resistance. First find the lowest low on your chart, or highest high. Next you would draw a 45 and a 22 ½ degree angle up from that low, or down from that top. The price bars should remain above the 45 from bottom, if the stock or whatever you are trading is to remain in an uptrend or bullish mode. If the bars break thru the 45 and the closing price is below the 45 for 3 or more bars, it is getting weak and reversing into a downtrend or bearish mode. You would then consider the top of that  highest bar a potential top and sell.

Next you would draw your 45 and 22 ½ degree angles down from that top. If the price bars are staying  under the 45 from bottom, and now also staying under the 45 from the top, it is now bearish or in down trend and remains bearish until the 45 from top is broken to the upside by 3 bars closing above 45. This would indicate a reversal to the upside and a buy. You can use the 45 alone for support and resistance buy and sell signals.

I f the price action moves far away from the 45 and heads to the 22 ½ then watch that angle for support or resistance. Many times price will reverse direction at or near the 22 ½ degree angle. These angles act as a type of moving average and can be used for buying or selling off of.

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I DO NOT just run any degree angle along bottoms or tops and put the angle to the price action, but rather have the fixed 45, and 22  1/2 degree angles from major tops and bottoms, and let the price action come to the angles just the way W D Gann did it.  www.aawealth.com

TRY this simple method on your charts and see if your trading improves.

by Robert Johnson  www.aawealth.com