By Jim Purucker and Pat Reda
On page 55 in W.D. Gann’s book. How to Profit From Commodities, Gann states, You will
always make the most prot by following the main trend and playing the long swing. You
can never make much money jumping in and out of the market trying to scalp it. If you
will put in time and study to determine the main trend, and then follow it the length of time that
it should run and not get Out until you get a denite indication of change in trend, you will make
big prots. It is much better to make three or four trades each year and make large prots than
it is to try to make 100 to 200 trades a year and be wrong half the time, and nally wind up with
a net loss. Yet there are times when it will pay to stay out of the market and wait for a denite
indication and a real opportunity, which is sure to come if you wait.
After 14 years of research and reflection, I’ve come to realize the profound wisdom
of W.D. Gann’s statement, that in order to make the greatest profit one must trade with
the long-term trend.
A major error is to focus on one or two favorite indicators, thus losing sight of the
overall big picture.
In previous articles of the Gann & Elliott Wave, I have revealed some of the valuable trading
tools and techniques to follow W.D. Gann’s philosophy of how to make big prots.
In order to dene the long-term trend, one must focus on, and look at the complete picture.
To properly dene the long-term trend, all of W.D. Gann’s most valuable trading tools and
techniques must be used and integrated into proper market analysis. This involves extensively
following many indicators, as the weight of the evidence will determine when and how to enter a
long term position trade and where to place stops for proper risk management.
A tremendous aid for following and analyzing Gann’s most valuable trading tools and
techniques on several different stock, option and futures markets comes through the use of
computer technology. My long-term goal to computerize W.D. Gann’s most valuable trading
tools and techniques is complete.
Pat Reda, my long time associate, has provided the computer technology link for the past
four years to nally achieve this goal. Pat has researched Gann and Elliott for the past seven
years in the stock, options and futures markets, and is an electrical engineer with an extensive
background in computer architecture and software design. He has designed software around
the Gann Wheel and the Square of Nine chart in order to facilitate mathematical harmony of
market movements in time and price.
Together we have developed an ultimate trading system which generates a disciplined
set of rules to obtain major buy and sell signals with short-term risk parameters in any stock,
options or futures market.
Past articles in the Gann & Elliott Wave magazine have provided the forum to release some
of W.D. Gann’s most valuable tools and techniques in order to assist others to help themselves
and make themselves independent, successful traders.
In conclusion, I want to make you aware of Pythagoras Aphorism Number four, which states
Assist a man in raising or lifting his burden; but do not assist him in laying it down. Once one
learns the disciplines and sets of rules to follow W.D. Gann’s most valuable trading tools and
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techniques, then and only then will it be your time to make the greatest prots by following the
main trend and playing the long swing!
Reference to the chart of the S&P500 clearly points out some of the most valuable trading
tools and techniques used by W.D. Gann.