Trading rules
and strategies from Gann trading have been used for years in the
trading industry. This trading technique stands out among thousands of ways to
trade in the stock market. The rules set by this trading technique can shape up
your financial future if you put them to use. Gann indicators are based on
geometric angles. These angles precisely measure each factor from price to the
time-frame. You could get insight into past, current and future market
conditions.Here are some
trading rules from Gann theory of trading to help you put on the right course
while trading:1. Never Ever Indulge in OvertradingAccording to Gann
trading rule, you should never
overtrade. If you risk it overtrading, you will get stuck into multiple losses.
Set realistic goals and open only a handful of trades per day to minimize the
risk involved. Limiting the number to 2 or 3 trades a day is the best way to
start with it. 2. Keep the Doubt Out of TradingAn element of
doubt could put your trading into a path to losses. So you should keep doubt at
bay while trading. If you aren’t sure how to trade without doubt, better get a
trading guide or look for a course that teaches you ins and outs of the trading
process. To be confident while trading, make sure you back-test your trading
guide to get to know when to trade in and trade out. 3. Invest Only in Active StocksBeing a trader,
you should know where to invest. Trading in active stocks works best because
they have huge movements. You shouldn’t invest in inactive companies where the
chances of money movement are pretty low. Similarly, you should treat the
currencies. Invest in volatile currencies such as Euro, GBP and USD rather than
investing in emerging markets currencies.4. Divide Capital into Several PartsTrading is
uncertain, in most cases. It’s because stock market trading depends heavily on
macro-economic, micro-economic and various other factors. Any incidence in or
out of the country you trade could affect the trading. For instance, in a
war-like situation, the market falls down rigorously. This is why you shouldn't
put all the eggs in just one basket. You should divide your capital into 10
equal parts and invest in trades accordingly. If one market gets affected, you
won’t suffer that badly. ConclusionStock market trading is
unpredictable so you should keep the rule handbook with you to ensure minimum
risk. Using theories such as Gunn theory, Elliott wave theory could help you
predict the price move in a better way. You should learn from these theories
and make the right move while trading to optimize your chances for financial
success. Get your hold over Gunn theory principles to leverage its potential to
earn more and emerge as a successful trader.
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