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Gann Levels

It is thought that W. D. Gann was the first trader to use the Fibonacci retracement ratios. The numbers used by Gann are either the same or only fractions away from the Fibonacci numbers, and he believed that highs and lows were all related to each other by these ratios. He also believed that the ratios could be used to make accurate assessments of when price targets would be reached. In essence, Gann theory is based both on time and price.

I’ve known many people to use Gann successfully with their trading, so if you have the time, it’s worth following it up. Bear in mind that the similarities with Fibonacci are no accident, so you’d be wise to make yourself familiar with both techniques and then take your pick. From my experience of using Gann, you can successfully use the numbers to determine price targets alone, without the use of time. Personally, I’ve had very good experiences trading both Gann and Fibonacci, so I would recommend that you investigate both and see whether you like either of them. As much as anything else, both techniques inherently contain a money-management system, which you can use to ensure that you minimize your losses and take profits.


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