Swing trading is a popular method for traders who want to profit from short-term price movements. One such technique used for swing trading is the Gann Astro Technique, which relies entirely on the concept of time cycles. In this article, we’ll explore the Gann Astro Technique and its basic rules for swing traders.
Understanding the Concept of Time Cycles
According to the “Gann Astro Technique”, time is the most important factor in determining market movements. Gann believed that the future is a repetition of the past and that each market movement is working out time in relation to some previous time cycle. He incorporated various factors, such as Scripture, natural laws, numerics, geometry, Pythagorean harmonics, astrocycles, and the Law of Vibration, to forecast future events. Gann’s primary source of knowledge was his understanding of the historical correspondence between cosmic vibration (celestial harmonics) and its effect on man’s “psycho-biological cycles.” These cycles have historically correlated with mass traders psychology and are reflected in stock market movements as well.
Gann also found mention of time cycles in ancient scriptures. For instance, the ancient Mayan Indians had a text that read, “All moons, all years, all days, all winds reach their completion and pass away. So does all blood reach its place of quiet as it reaches its power and its throne. Measured was the time in which they could praise the splendor of the Trinity.”
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Basic Rules for Swing Traders using Gann Astro Technique
- Know the Correct Plays
To lock in profits and seek the true trend, it is important to know the “correct plays.” Taking a loss is merely playing for a better position. One trades strictly for probable future results, not for what the market might do. When swing trading, adjust your expectations, and trust yourself to get out of bad situations and trades. Use tighter stops when trading swings and wider stops when trading trends.
- Anticipate, Don’t React
Gann Astro Technique teaches you to anticipate, not react. Know what you are going to do before the market opens, and always have a plan – but be flexible! It is essential to use intuition and listen to that little voice inside your head, “Does the trade feel right?” If in doubt, get out. Use paper trading to cultivate the faith necessary to recognize and trade pattern repetition.
- Basic Entry and Exit Rules
If the trade moves in your favor, carry it overnight, and expect to exit the next day around the objective point. If your entry is correct, the market should move favorably almost immediately. Do not carry a losing position overnight. A strong close indicates a strong opening the following day. If the market offers you a windfall of big profits, take them without anticipating another big move. In all systems, winners are skewed. Even though making steady profits, 3-4 really big trades may actually make the month. It is vitally important to always “lock in” your trades. Don’t give back profits in trading.
- Trust Yourself
It is okay to use intuition and to listen to that little voice inside your head. But always trust yourself to get out of bad situations and trades. Remember, never, ever average a loss. Sell out if you think you are wrong. Buy back when you believe you are right. Never, never, never listen to anyone else’s opinion. Only you know when your trade isn’t working.
The Gann Astro Technique is a unique approach to short-term swing trading based on time cycles. To use this technique successfully, you must know the correct plays, anticipate, and trust yourself. Use basic entry and exit rules and paper trading