WD Gann Methods – Price Formations

If a picture really is “worth a thousand words,” and Price Formations graphically capture the trading public’s manic-depressive emotional swings, then every chart says a mouthful about mass psychology.

Each market evinces its own distinctive habits and “personality,” leading to unique market bottoming and market topping patterns.

Commonly, repetitions in historic Price Formations occur only once every generation or so in any given market. Other formations recur approximately every 60 years.

Spot a relevant market Price Formation and you’ve uncovered a possibly potent confirming indicator to supplement time-based criteria.

WD Gann’s View on Price Formations

In the financial and commodity markets, WD Gann was the one revered for his wisdom, but he still liked to quote Solomon from the Bible: “That which has been is that which will be. And that which had been done is that which will be done. So there is nothing new under the sun.”

One important precept derived from reviewing Price Formations tells us to buy (or continue holding long positions) when a market advances above old levels that have not been exceeded for a long time, or, especially at new all-time high prices.

As WD Gann said, “A market is never too high to buy or too low to sell.”

Ironically, the most knowledgeable observers — like the veteran crude oil trader who “knows” to always sell at $40 — were caught on the wrong side after witnessing a crude oil proceeding with its conquest of overhead resistance in 2004.

Perceptive use of market Price Formations can help you forecast the timing of a move and its probable extent and velocity.

Market Valuation & Forecasting – Contact Gann Global

The Price Formations method is one of five WD Gann Forecasting Methods. To learn more about how Price Formations relates to market forecasting, subscribe for free and get more detailed information in the “Essential Course” by Gann Global Financial (available to subscribers and Insiders).

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