Gann’s last major book was 45 Years on Wall Street, published in 1949, in which he gave a candid account of how he had beaten the market for decades.
He believes that there are three main reasons why investors suffer losses in market trading: (1) Excessive trading on limited capital.
(2) No stop plate is set to control losses.
(3) Lack of market knowledge.
This is the most important cause of loss in the market.
So Gann’s advice to any investor is: Study the market before you lose money.
Before entering the market, investors must be aware of the following: (1) Investors may make the wrong decision to buy or sell.
(2) Investors must know how to deal with mistakes.
(3) In and out of the market must be according to a set of established rules, never blindly guess the market development.
(4) Market conditions and times often change, and investors must learn to follow the changes in market conditions.
Gann summed up 45 years of experience in Wall Street investment and trading, wrote twelve trading rules and 21 trading codes, the importance of which is self-evident.
Gann’s twenty-one Rules of Trade also apply to the foreign exchange market, and are summarized as follows: (1) Divide the capital into ten shares, and each time you buy or sell in the market, the loss shall not exceed one tenth of the capital.
(2) Set a stop loss level to reduce the possible losses caused by wrong trading.
(3) Do not oversell.
(4) do not let the position from surplus to loss.
(5) Do not go against the market, the market trend is not obvious, rather on the sidelines.
(6) When entering the market to be firm, hesitant do not enter the market.
(7) Only buy and sell in active markets. Do not operate when trading is light.
(8) Avoid entering and leaving the market with price limits, and buy and sell in the market.
(9) The profit can be guaranteed by the stop loss level.
(10) After winning the battle in the market, part of the profits can be set aside.
(11) Do not only expect to collect interest in trading.
(12) When trading losses, do not increase, seeking to pull down the cost, may accumulate small mistakes into big mistakes.
(13) Don’t get into the market out of impatience, and don’t clear out of impatience.
(14) Don’t do the business with more loss and less profit.
(15) The stop position set at the time of market entry should not be cancelled at random.
(16) Do more wrong, to wait for the opportunity to enter the market, should not sell too close.
Both sides should be good at being right.
(18) Don’t buy because the price is too low, and don’t bear because the price is too high.
(19) Avoid the use of pyramid at inappropriate times.
(20) Never hedge.
(21) Avoid altering the buying and selling strategy of your position without appropriate reasons.
