There are plenty of stock index trading systems, but which is the best?



Stock Index Trading Systems ? Catch and Follow the Trends!

For profitable stock index trading, you need to be able to lock into, and run the big profitable trends, and the best way to do this is by using technical analysis to spot, and act, on these trends.

The best way to do this is to find a stock index trading system that has stood the test of time.

Stock Index Trading Systems and Gann's Methods for Profit

W D Gann was a trader and legend in his own lifetime. Even today, a half a century after his death, he remains one of the most influential traders of all time.

Gann had an astounding trading record and amassed a fortune of over $50 million dollars in his trading career. Many of his recommendations are on record, for example:

Each year Gann published a forecast for the following year. In 1928 he published a forecast, which predicted the date of the September 1929 US Stock Market high, and that a black Friday would occur, a year in advance of the actual events.

In 1932, he recommended buying stocks at the all time low in the Dow in June and July.

History repeats itself allowing us to Predict the Future Gann's major contention was that certain laws governed not only the markets, but nature as well, and were universal in scope.

He argued that human nature repeated itself and that by looking at the past we could make predictions about the future.

In "Wall Street Stock Selector" Gann said.

"Just remember one thing, whatever has happened in the past in the stock market and Wall Street will happen again. Advances in bull markets will come in the future, and panics will come in the future, just as they have in the past. This is the working out of a natural law ?" and, "It is action in one direction and reaction in the opposite direction. In order to make profits, you must learn to follow the trend and change when the trend changes."

How Gann Can Help You Become a Better Trader

If you are looking at stock index trading systems, then Gann is one of the best traders to consider. While Gann wrote much of his work at the turn of the century, it still is as significant today as it was then.

Gann was aware that human behaviour repeats itself repeatedly. Since price patterns reflect shifts in human psychology, one can assume that certain patterns, cycles and trends, will repeat themselves again. A simple formula reinforces this concept

PRICE + TIME = VALUE

We all associate value with a certain price that we are accustomed to paying over time and Gann developed this concept.

Gann combined price and time to generate signals to trade the market. Gann believed crucial price movements happened when price and time converged. These points usually indicated an important trend change was imminent. If however, price and time were not coordinated, or did not converge, time always held priority over price.

Time was therefore considered by Gann as the ultimate indicator, because time governs all of nature.

Exploring Gann's Methods

There are many stock index-trading systems, but Gann, with his unique methods and insight into trader psychology, makes his work as relevant today as when he first wrote it.